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PLS. MEM. OF P. & A. IN OPPN TO DEFS. MOT. FOR SUMM. J.

MARK D. ROSENBAUM, SBN [email protected] FOUNDATION OF SOUTHERNCALIFORNIA1313 W. 8th StreetLos Angeles, CA 90017

T: (213) 977-5220, F: (213) 417-2220

RONALD L. OLSON, SBN [email protected], TOLLES & OLSON LLP355 South Grand Avenue, 35th Fl,Los Angeles CA 90071-1560T: (213) 683-9100, F: (213) 683-5111

JOHN C. ULIN, SBN [email protected]

ARNOLD & PORTER, LLP777 South Figueroa StreetLos Angeles, CA 90017T: (213) 243-4228, F: (213) 243-4199

Attorneys for Plaintiffs(Additional counsel listed on next page)

LAURENCE H. TRIBE, SBN [email protected] LAW SCHOOL*Hauser 420, 1575 Massachusetts Ave.Cambridge, MA 02138T: (617) 495-1767

GARY L. BLASI, SBN [email protected]

UCLA SCHOOL OF LAW*405 Hilgard AvenueLos Angeles, California 90024T: (310) 206-9431, F: (310) 206-1234

AMOS E. HARTSTON, SBN [email protected] CITY LAW CENTER1309 East Seventh StreetLos Angeles, CA 90021T: (213) 891-2880, F: (213) 891-2888

*For identification purposes only

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

GREGORY VALENTINI, et al.,

Plaintiffs,

v.ERIC SHINSEKI, et al.,

Defendants.

Case No. CV-11-04846-SJO (MRW)x

The Honorable S. James Otero

PLAINTIFFS MEMORANDUM OFPOINTS AND AUTHORITIES INOPPOSITION TO DEFENDANTSMOTION FOR SUMMARYJUDGMENT

NO HEARING DATE

Case 2:11-cv-04846-SJO-MRW Document 125 Filed 05/10/13 Page 1 of 26 Page ID #:3824

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- 2 -PLS. MEM. OF P. & A. IN OPPN TO DEFS. MOT. FOR SUMM. J.

Additional Counsel

PETER ELIASBERG, SBN [email protected] B. SAPP, SBN [email protected]

ACLU FOUNDATION OF SOUTHERNCALIFORNIA1313 W. 8th StreetLos Angeles, CA 90017T: (213) 977-5220, F: (213) 417-2220

ADAM MURRAY, SBN [email protected] A. TYNER, SBN [email protected]

ELIZABETH HAMAN KUGLER,SBN [email protected] CITY LAW CENTER1309 East Seventh StreetLos Angeles, CA 90021T: (213) 891-2880, F: (213) 891-2888

ERIC SHAPLAND, SBN [email protected] J. FINSTEN, SBN 234999

[email protected] K. POORMAN, SBN [email protected] MARTINEZ, SBN 274210

[email protected] & PORTER, LLP777 South Figueroa StreetLos Angeles, CA 90017T: (213) 243-4228, F: (213) 243-4199

JONATHAN [email protected] Hac Vice

MASSEY & GAIL LLP1325 G St. NW, Suite 500Washington, D.C. 20005T: (202) 652-4511, F: (312) 379-0467

LEONARD GAIL

[email protected] Hac ViceMassey & Gail LLP50 East Washington St., Suite 400Chicago, IL 60602T: (312) 283-1590, F: (312) 379-0467

BRADLEY S. PHILLIPS, SBN 85263

[email protected] TAYLOR, SBN [email protected], TOLLES & OLSON LLP355 South Grand Avenue, 35th Fl,Los Angeles CA 90071-1560T: (213) 683-9100, F: (213) 683-5111


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- i -PLS. MEM. OF P. & A. IN OPPN TO DEFS. MOT. FOR SUMM. J.

TABLE OF CONTENTS

Page

I. INTRODUCTION ............................................................................................... 1II. LEGAL STANDARD ......................................................................................... 3III. ARGUMENT ....................................................................................................... 4

A. DVAs Use of 8153 For Purely Commercial Leases IsContrary to Congresss Intent That Sharing Agreements RelateDirectly to the Provision of Health Care ................................................... 5

B. DVA Relies on a Series of Inapplicable Principles ofAdministrative Law to Avoid Judicial Review ......................................... 81. DVAs Entry into the Challenged Leases Is Subject To

Judicial Review ............................................................................... 82. DVAs Interpretation of the Scope of Its Authority Is Not

Entitled To Deference ................................................................... 12a. The Statute is Unambiguous, so DVAs Interpretation

Is Irrelevant ......................................................................... 12b. Even if the Statute Were Ambiguous, DVA Is Not

Entitled To Chevron Deference Because It Offers NoFormal Interpretation of 8153 ......................................... 13

c. DVAs Interpretation of 8153 Cannot Be Saved byResort To the Respect Sometimes Afforded ToAgency Interpretations underMeadandSkidmore ............ 15

3. The Overwhelming Evidence Required to InferCongressional Acquiescence Is Not Present................................. 16

IV. CONCLUSION ................................................................................................. 20


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- ii -PLS. MEM. OF P. & A. IN OPPN TO DEFS. MOT. FOR SUMM. J.

TABLE OF AUTHORITIES

Page(s)FEDERAL CASES

Abbott Labs. v. Gardner,387 U.S. 136, 87 S. Ct. 1507, 18 L. Ed. 2d 681 (1967) ...................................... 9

American Friends Serv. Comm. v. Webster,720 F.2d 29 (D.C. Cir. 1983)............................................................................. 11

Arent v. Shalala,70 F.3d 610 (D.C. Cir. 1995)............................................................................. 13

Armstrong v. Bush,924 F.2d 282 (D.C. Cir. 1991)........................................................................... 11

Barnhart v. Walton,535 U.S. 212, 122 S. Ct. 1265, 152 L. Ed. 2d 330 (2002) ................................ 13

Bd. of Governors of Fed. Reserve Sys. v. MCorp Fin., Inc.,502 U.S. 32, 112 S. Ct. 459, 116 L. Ed. 2d 358 (1991) ...................................... 9

Beno v. Shalala,30 F.3d 1057 (9th Cir. 1994) ............................................................................... 8

Bob Jones Univ. v. United States,461 U.S. 574, 103 S. Ct. 2017, 76 L. Ed. 2d 157 (1983) ............................ 17, 18

Cape Cod Hosp. v. Sebelius,630 F.3d 203 (D.C. Cir. 2011)........................................................................... 19

Chevron U.S.A. Inc. v. Natural Resources Defense Council,467 U.S. 837, 104 S. Ct. 2778, 81 L. Ed. 2d 694 (1984) ........................... passim

Christensen v. Harris County,529 U.S. 576, 120 S. Ct. 1655, 146 L. Ed. 2d 621 (2000) ................................ 14

Drakes Bay Oyster Co. v. Salazar,2013 WL 451860, -- F. Supp. 2d -- ................................................................... 11

Gibbons v. Fronton,

533 F. Supp. 2d 449 (S.D.N.Y. 2008) ............................................................... 10Haig v. Agee,

453 U.S. 290, 101 S. Ct. 2766, 69 L. Ed. 2d 640 (1981) .................................. 19

Heckler v. Chaney,470 U.S. 821, 105 S. Ct. 1649, 84 L. Ed. 2d 714 (1985) .............................. 9, 10

High Sierra Hikers Assn v. Blackwell,390 F.3d 630 (9th Cir. 2004) ............................................................................. 14


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- iii -PLS. MEM. OF P. & A. IN OPPN TO DEFS. MOT. FOR SUMM. J.

Holder v. Martinez Gutierrez,132 S. Ct. 2011, 182 L. Ed. 2d 922 (2012) ....................................................... 13

Morales-Izquierdo v. Gonzales,486 F.3d 484 (9th Cir. 2007) (en banc) ....................................................... 17, 18

Motor Vehicle Mfrs. Assn of U.S., Inc. v. State Farm Mut. Auto. Ins. Co.,

463 U.S. 29 (1983) ...................................................................................... 12, 19N.L.R.B. v. United Food & Commercial Workers Union, Local 23, AFL-CIO,

484 U.S. 112, 108 S. Ct. 413, 98 L. Ed. 2d 429 (1987) .................................... 12

Nw. Envtl. Advocates v. U.S. E.P.A.,537 F.3d 1006 (9th Cir. 2008) ........................................................................... 17

Pinnacle Armor, Inc. v. United States,648 F.3d 708 (9th Cir. 2011) ......................................................................... 9, 16

Rapides Regional Medical Center v. Secretary,974 F.2d 565 (5th Cir. 1992) ....................................................................... 10, 19

Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers(SWANCC), 531 U.S. 159, 121 S. Ct. 675,148 L. Ed. 2d 576 (2001) ............................................................................. 17, 18

Strickland v. Morton,519 F.2d 467 (9th Cir. 1975) ............................................................................. 11

Topgallant Grp., Inc. v. United States,704 F. Supp. 265 (D.D.C. 1998) ....................................................................... 12

U.S. Fidelity and Guar. Co. v. Lee Investments, LLC,641 F.3d 1126 (9th Cir. 2011) ............................................................................. 9

United States v. Mead Corp.,533 U.S. 218, 121 S. Ct. 2164, 150 L. Ed. 2d 292 (2001) ............ 3, 4, 13, 14, 15

United States v. Riverside Bayview Homes, Inc.,474 U.S. 121, 106 S. Ct. 455, 88 L. Ed. 2d 419 (1985) .................................... 18

Wilderness Socy v. U.S. Fish & Wildlife Serv.,353 F.3d 1051 (9th Cir. 2003) (en banc), amended on rehg en banc onother grounds, 360 F.3d 1374 (9th Cir. 2004) ................................ 3, 4, 8, 13, 14

Wilderness Watch, Inc. v. U.S. Fish & Wildlife Serv. ,

629 F.3d 1024 (9th Cir. 2010) ........................................................................... 14

STATUTES,RULES ANDREGULATIONS

38 C.F.R. 17.142 ....................................................................................................... 14

5 U.S.C. 701-708 ...................................................................................................... 3

5 U.S.C. 706(2)(A) ..................................................................................................... 3


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- iv -PLS. MEM. OF P. & A. IN OPPN TO DEFS. MOT. FOR SUMM. J.

5 U.S.C. 706(2)(C) ...................................................................................................... 3

38 U.S.C. 8101(3) ..................................................................................................... 10

38 U.S.C. 8152(1) ............................................................................................. 5, 7, 10

38 U.S.C. 8153 ................................................................................................... passim

38 U.S.C. 8151-53 ...........................................................................................passim

38 U.S.C. 8153(3)(A) ................................................................................................. 6

38 U.S.C. 8153(3)(B)(i) .............................................................................................. 6

38 U.S.C. 8161-69 .................................................................................................... 5

38 U.S.C. 8163 ............................................................................................................ 5

Veterans Millennium Health Care and Benefits Act,Pub. L. No. 106-117, Title II, 208(a), (b), 113 Stat. 1567 (1999)

(former 38 U.S.C. 8162(a)(2)(B), repealed 2012) ............................................ 5

OTHERAUTHORITIES

H.R. REP. 104-690 (1996) ............................................................................................. 7


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PLS.MEM.OFP.&A.INOPPNTODEFS.MOT.FORSUMM.J.

MEMORANDUM OF POINTS AND AUTHORITIES

I. INTRODUCTIONWhen Congress authorized the Department of Veterans Affairs (DVA), through

38 U.S.C. 8151-53, to enter into agreements to share health-care resources, it made

clear that it intended to authorize only agreements that are related directly to the

provision of health care. As detailed in Plaintiffs own motion for summary judgment,

filed concurrently with this opposition, Congress did so through both an express

statement of congressional intent and an explicit definition of health-care resources

that is consistent with the commonsense understanding of that term. DVA has, howeve

treated the statute as if it were a blanket grant of authority to lease the land on its West

Los Angeles Campus (WLA Campus) to anyone forany purpose, including for purely

commercial purposes that have nothing to do with health care.

Plaintiffs Administrative Procedure Act (APA) claim challenges these purely

commercial leases on the ground that they exceed DVAs statutory authority. Under

Chevron U.S.A. Inc. v. Natural Resources Defense Council, 467 U.S. 837, 104 S. Ct.

2778, 81 L. Ed. 2d 694 (1984), consideration of Plaintiffs APA claim begins with the

plain language of the statute. Because the challenged leases do not satisfy the

unambiguous statutory requirement that sharing agreements involve health-care

resources, that plain language is both the beginning and the endof the inquiry. DVA

conveniently ignores almost entirely this first, dispositive step of the inquiry, merely

asserting, with no analysis or explanation, that the statute is broad and ambiguous and

offering an interpretation that is plainly contradicted by the statutes clear meaning.

DVA bases its summary judgment argument largely on an amalgam of quotes

extracted from administrative law cases that are divorced from their broader doctrinal

framework and totally inapplicable to Plaintiffs claim. DVA advances three distinct

arguments. First, DVA argues that its leasing decisions are unreviewable. It claims that

Congresss delegation of discretion to DVA to enter into sharing agreements related to

health-care resources reflects congressional intent to foreclose judicial review of


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DVAs determination of what health-care resourcesthe term that Congress used to

define the boundaries of DVAs discretionmeans. In other words, DVA effectively

claims that, when Congress gives an agency discretion to do X, the agency may do

whatever it wants, without meaningful judicial review, so long as it calls what it does

X. The argument is on its face specious, and it flies in the face of countless cases that

recognize that courts can, indeed must, review whether agencies have acted outside of

the boundaries of the authority delegated to them by Congress.

Second, DVA argues that its interpretation of the statute is entitled to deference.

But that is not true where, as here, the agencys interpretation is contrary to the plain

language of the statute and there is no evidence that its informal interpretations, which

contain no reasoned analysis, meet the well settled conditions for either deference or

even the lesser respect sometimes due internal agency guidance.

Finally, DVA argues that Congress has acquiesced in DVAs interpretation of the

statute. DVA claims the circumstances here justify the extraordinarily unusual departur

from the presumption of reviewability of agency action that may occur where there is an

overwhelming showing that Congress explicitly and formally considered the precise

question before the court and took no action. Such a departure is extremely rare because

it raises serious separation-of-power questions by suggesting that Congress, rather than

the courts, is empowered to interpret and enforce the law against the Executive Branch.

DVA cites no Ninth Circuit case that supports a finding of congressional acquiescence

and no case in which a court found such acquiescence on facts even remotely similar to

those present here.

DVAs arguments are inconsistent with well settled doctrine governing review of

agency decisions and, if accepted, would do great injury to Congresss carefully

calibrated statutory scheme governing DVA land, generally, and the WLA Campus, in

particular. DVA seeks to transform Congresss specific authorization of health-care

resource sharing agreements into a blanket power for DVA to encumber its property

however it sees fit, regardless of any relationship to health care and totally immune from


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judicial review. This Court should decline DVAs invitation to effectively re-write the

relevant statute and deny DVAs motion.

II. LEGAL STANDARDThe APA, 5 U.S.C. 701-708, governs judicial review of agency action. See

Wilderness Socy v. U.S. Fish & Wildlife Serv., 353 F.3d 1051, 1059 (9th Cir. 2003) (en

banc), amended on rehg en banc on other grounds, 360 F.3d 1374 (9th Cir. 2004).

Under the APA, courts may set aside agency action if the agency decision is arbitrary,

capricious, an abuse of discretion, or otherwise not in accordance with law, 5 U.S.C.

706(2)(A), or in excess of statutory jurisdiction, authority, or limitations, or short of

statutory right, id. 706(2)(C). Plaintiffs APA claim turns on whether DVA was

authorized to enter into the challenged leases under 38 U.S.C. 8151-53, and the claim

is therefore governed by Chevron U.S.A. Inc. v. Natural Resources Defense Council, 46

U.S. 837, 104 S. Ct. 2778, 81 L. Ed. 2d 694 (1984).

In Chevron, the Supreme Court set forth a two-step test for judicial review of

administrative-agency interpretations of federal law. Under the first step: If the intent

of Congress is clear, that is the end of the matter; for the court, as well as the agency,

must give effect to the unambiguously expressed intent of Congress. Wilderness

Socy, 353 F.3d at 1059 (quoting Chevron, 467 U.S. at 842-43). Congressional intent

may be determined by traditional tools of statutory construction, and if a court using

these tools ascertains that Congress had a clear intent on the question at issue, that intent

must be given effect as law. Id. (quoting Chevron, 467 U.S. at 843 n.9).

If a court concludes that the statute is silent or ambiguous with respect to the

issue at hand, it proceeds to the second step underChevron, which involves analyzing

the agencys interpretation of the statute. Id. [W]hen it appears that Congress

delegated authority to the agency generally to make rules carrying the force of law, and

that the agency interpretation claiming deference was promulgated in the exercise of tha

authority, id. (quoting United States v. Mead Corp., 533 U.S. 218, 226-27, 121 S. Ct.

2164, 150 L. Ed. 2d 292 (2001)) (emphasis in original), the court must defer to the


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agency so long as the agencys answer is based on a permissible construction of the

statute, id. (quoting Chevron, 467 U.S. at 843). For administrative decisions that do

not meet these standards, the agencys interpretation is entitled not to deference, but to

a lesser respect based on the persuasiveness of the agency decision. Id. at 1067

(quotingMead, 533 U.S. at 228).

III. ARGUMENTPlaintiffs APA claim turns on whether the challenged leases fall within DVAs

authority to shar[e] health-care resources. It involves the straightforward question

of whether DVA exceeded its statutory authority, as defined in 38 U.S.C. 8151-53.

DVAs arguments are all variations on the same theme: that this Court should either

decline to review DVAs decisions at all or defer to DVAs interpretation of the scope o

its authority under 38 U.S.C. 8153.

In fact, DVAs interpretation is not entitled to deference underChevron and its

progeny. Where, as here, the language of a statute is clear, an agencys interpretation is

irrelevant and courts must set aside agency decisions that contravene the statute. See

Chevron, 467 U.S. at 842-43. DVAs interpretation of 8153 is contrary to the plain

and unambiguous language of the statute, under which the challenged leases do not

involve sharing of health-care resources. DVAs suggestions to the contrary are

based on inapplicable standards or mischaracterizations of well settled doctrine. DVAs

misreading of the statute is entitled to no deference and is subject to de novo review by

this Court.1

1DVAs renewed challenge to Plaintiffs standing (Defs. Mot. at 4, n. 6) is without

merit. As the Court held in its thoroughly reasoned order denying the Governmentsstanding-based challenge to the APA claim, Plaintiffs have standing to bring this

claim. March 16 Order at 8-14. DVA half-heartedly argues that the burden ofestablishing standing is more rigorous at the summary judgment stage. This ignores,of course, that the burden on summary judgment is different from the burden ona motion to dismiss only insofar as summary judgment may require evidence ratherthan turning on the allegations in the complaint. Plaintiffs APA claim has notchanged: DVA exceeded its statutory authority in entering into the challenges ESAs,which has deprived Plaintiffs of access to space and opportunities that benefitveterans. DVA does not seriously dispute the latter contentionthat entering into thechallenged leases encumbers that space and prevents DVA from using it for other

purposesbut, in any event, that fact is established by uncontradicted declarations in(Footnote Contd on Following Page)

Case 2:11-cv-04846-SJO-MRW Document 125 Filed 05/10/13 Page 10 of 26 Page ID#:3833

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A. DVAs Use of 8153 For Purely Commercial Leases Is Contrary toCongresss Intent That Sharing Agreements Relate Directly to theProvision of Health Care

As Plaintiffs demonstrate in detail in their Motion for Summary Judgment, see

Pls. Mot. for Summ. J. at 10-16, 38 U.S.C. 8151-53 clearly limits DVAs authority

to enter into health-care resource sharing agreements to resources that are directly

related to the provision of health care. Congress defined health-care resource

precisely to require that each agreement have some direct relationship to the provision o

health care, see id. 8152(1), and both Congresss express statement of purpose and the

structure of the statute confirm this plain meaning. Congress also enacted the Enhanced

Use Lease statute, 38 U.S.C. 8161-69, which explicitly authorized DVA to enter into

purely commercial leases that are not related to the provision of health care, if they

generate sufficient revenue to improve veteran medical care, see Veterans Millennium

Health Care and Benefits Act, Pub. L. No. 106-117, Title II, 208(a), (b), 113 Stat. 156

(1999) (former 38 U.S.C. 8162(a)(2)(B), repealed 2012), and contains extensive

procedural and notice-and-comment requirements that do not apply to health-care

resource sharing agreements, see 38 U.S.C. 8163. Reading 8153 to authorize

identical arrangementspurely commercial leases with no relation to health care for

veterans but that generate revenue for DVAwould render these provisions superfluou

and negate the additional requirements Congress imposed on purely commercial leases.

Because the plain language and structure of the statute make it unambiguous, that is the

end of the matter. Chevron, 467 U.S. at 842-43.

As explained in detail in Section III.B.2.c, infra, the Record contains no analysis

that supports DVAs conclusion that 8153 allows purely commercial leases with no

relation to health care. It instead contains only numerous self-serving and conclusory

(Footnote Contd From Previous Page)

the record. Dkt. Nos. 64-66. DVA offers no reason for the Court to revisit its priorrejection of DVAs standing arguments, compare March 16 Order at 8-14, andDefendants Motion to Dismiss at 4-8 (Dkt. No. 32), with Defs. Mot. at 4 n.6, andPlaintiffs incorporate by reference their arguments from the motion to dismiss stage.


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assertions by DVA that the section does. DVA provides little more analysis in its

motion and does not explain coherently how the statute can plausibly be read to

authorize purely commercial leases. It does little more than repeat the conclusory

assertions. Defs. Mot. at 13:12-13 (agreements to share space are agreements to share

health-care resources) (emphasis added). Occasionally, DVA offers glimpses into a

purported rationale for its interpretation of 8153: that the rents it derives from the

challenged leases sufficiently benefit veteranseven though such revenues can cause a

countervailing decrease in congressional fundingto justify the diversion of land for

non-health-care purposes. Id. at 18:10-15. But DVA never explains how this rationale

which would allow any lease to be treated as a health-care resource sharing agreemen

is consistent with the clear and unambiguous language that Congress used to define

health-care resources and the broader statutory scheme regulating DVA land.

Instead of reconciling its interpretation with the plain language and structure of

the statute, DVA references a statutory provision establishing when it must subject to

competitive bidding a health-care resource sharing agreement for a commercial service

the use of medical equipment orspace, or research, which appears at 38 U.S.C.

8153(3)(A) & (B)(i). Defs. Mot. at 13 (emphasis in original). From this unremarkable

statutory acknowledgement that a health-care resource may sometimes involve the use

of space, DVA would have this Court infer that all space is a health-care resource,

regardless of how it is used. That is wrong and inconsistent with the language and

structure of the statute. To be sure, a health-care resource, such as hospital rooms or

even a laundry facility for those rooms, can be space. But it is a logical fallacy to

suggest that means all space is a health-care resource.2

Congresss mention of space

as a health-care resource is a reference to medical space, not any space. Many

2The flaw in DVAs logic is further illustrated when DVA reasons that Plaintiffs

assertion that the challenged agreements do not concern the sharing of health-careresources, depends upon a contention that no land or building on [the WLA Campus]is a health-care resource. Brief at 13:19-23. As DVA fails to appreciate, the factthat land on the WLA Campus can be a health-care resource does not mean that all ofit is or that leases for any of that that land are arrangements for the mutual use orexchange of use of health-care resources.


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spaces on the WLA Campus couldbe used to provide health care to veterans, but that

does not, for example, make UCLAs baseball stadium or Brentwood Schools athletic

fields medical spaces, let alone health-care resources. To the contrary, use of space

for these purposesprevents DVA from using it to provide health care to veterans.

DVAs reliance on 1996 amendments to its sharing authority (Defs. Mot. at 9-10

is misplaced. DVAs argument ignores completely the definition of health-care

resource in 8152(1), which explicitly requires some direct connection to the provision

of health care for a resource to be subject to sharing under the revised authority.

Moreover, the expansion in the scope of DVAs authority to share health-care resources

in no way suggests that Congress intended to authorize DVA to enter into commercial

leases with no relation to health care, just because the agreements generate revenue.

DVA relies on a single sentence from a House Committee Report indicating that the

Committee expected that the Department would broadly construe this new authority.

H.R. REP. 104-690 at 11 (1996). But DVA ignores the context of both the report itself

and the underlying legislation. Both the plain text of the proposed statutory

amendments, including the statement of purpose and definition, and the House Report

repeatedly referenced the underlying motivation of expanding health-care resources

and repeatedly framed the problem that the legislation sought to address in terms of

medical care and providers. See, e.g.,H.R. Rep. 104-690 at 11 (1996) (stating that the

bill would authorize VA facilities to enter into such sharing agreements not only with

health care facilities but with health insurers or any other entity or individual and would

expand to include, for example, support services, [within] the scope of resources which

might be sold or purchased under such a contract to any health care entity (emphasis

added)); see also Pls. Mot. for Summ. J. at 15-16. Congresss expression of hope that

DVA would use its authority broadly to expand sharing of health-care resources cannot

reasonably be read to suggest that Congress intended DVA to ignore the plain text of the

statute by using it to enter into purely commercial leases.

As both Chevron andWilderness Society make clear, when an agency exceeds its


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statutory authority, courts must set the agency action aside. SeeChevron, 467 U.S. at

842-43 (holding the court, as well as the agency, must give effect to the unambiguously

expressed intent of Congress); Wilderness Socy, 353 F.3d at 1061 (holding the U.S.

Fish and Wildlife Services Enhancement Project was void without regard to the

agencys interpretation because [t]he language, purpose and structure of the Wilderness

Act support[ed] the conclusion that Congress spoke clearly to preclude commercial

enterprise in the designated wilderness); see alsoBeno v. Shalala, 30 F.3d 1057, 1071

(9th Cir. 1994) (holding deference is not appropriate if an agencys interpretation of a

relevant statute conflicts with the statutes plain meaning.). Judicial review is therefore

appropriate here, and DVAs decisions must be set aside.

B. DVA Relies on a Series of Inapplicable Principles of AdministrativeLaw to Avoid Judicial ReviewUnable to fit the challenged leases within the unambiguous meaning of health-

care resource sharing under Section 8153, DVA relies on several inapplicable

administrative law principles in an effort to convince the Court to defer to what DVA

has done. Specifically, DVA offers three purported reasons for this Court to defer: (1)

DVAs entry into the agreements is notsubject to judicial review at all; (2) DVAs

interpretation of 8153 is entitled to deference; and (3) Congress has acquiesced in

DVAs interpretation of 8153. None of these arguments has merit.

1. DVAs Entry into the Challenged Leases Is Subject ToJudicial Review

DVA erroneously argues that its decisions to enter into the challenged leases are

not subject to judicial review because such decisions are committed entirely to the

discretion of its Secretary. Defs. Mot. at 3-12. In support of this argument, DVA relies

on the uncontested proposition that the Secretary has discretion to decide whether

entering into a particular health-care resource sharing agreement is in the best interests

of the program. Id. at 6-7. That proposition is beside the point: Plaintiffs argument is

that, because these agreements do not involve health-care resources, the Secretarys

discretion is not implicated. It is axiomatic that agencies are creatures of statute and


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may not act in excess of their statutory authority. See, e.g., U.S. Fidelity and Guar. Co.

v. Lee Investments, LLC, 641 F.3d 1126, 1135 (9th Cir. 2011) ([T]he constant theme

generally applicable to administrative agencies [is] that they are creatures of statute,

bound to the confines of the statute that created them . . . .). Whether an agencys

action exceeds its statutory authority is subject to review, regardless of how much

discretion Congress granted the agency within its lawful authority. See Heckler v.

Chaney, 470 U.S. 821, 832, 105 S. Ct. 1649, 84 L. Ed. 2d 714 (1985) (holding that,

when agencies act, that action at least can be reviewed to determine whether the agency

exceeded its statutory powers).

As the Ninth Circuit has explained, there is a strong presumption that Congress

intends judicial review of administrative action. Pinnacle Armor, Inc. v. United States

648 F.3d 708, 718 (9th Cir. 2011) (internal quotation marks omitted); see alsoBd. of

Governors of Fed. Reserve Sys. v. MCorp Fin., Inc., 502 U.S. 32, 44, 112 S. Ct. 459,

466, 116 L. Ed. 2d 358 (1991) (holding that only upon a showing of clear and

convincing evidence of a contrary legislative intent should the courts restrict access to

judicial review (quotingAbbott Labs. v. Gardner, 387 U.S. 136, 141, 87 S. Ct. 1507, 1

L. Ed. 2d 681 (1967))). This presumption is overcome only in two narrow

circumstances: (1) when Congress expressly bars review by statute, and (2) in those

rare instances where statutes are drawn in such broad terms that in a given case there is

no law to apply. Pinnacle Armor, 648 F.3d at 718-19 (internal quotation marks

omitted). Examples of the second circumstance include those involving an agencys

power to manage its own docket, those where courts have neither standards nor

expertise, such [as] when [they] are asked to review questions of national security, and

those involving an agencys decision to deny a discretionary federal loan. Id. at 720.

DVA cannot overcome the presumption of judicial review here. Congress has no

explicitly prohibited review of whether the challenged leases are health-care sharing

agreements. Additionally, Congress has provided a standard that can be applied to

review the agencys conduct: whether the arrangement is an agreement for the mutual


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use or exchange of use of health-care resources. Indeed, Congress went so far as to

provide a statutory definition that sets the outer limit of DVAs authority.3

As

demonstrated in Section III.A, supra, and in greater detail in Plaintiffs Motion for

Summary Judgment, see Pls. Mot. for Summ. J. at 10-16, the meaning of that standard

can be discerned through basic rules of statutory construction that courts apply every

day. The standard therefore can and should serve as the basis for judicial review of

whether DVA had authority to act. See Heckler, 470 U.S. at 832-33 (holding that courts

can determine whether the agency exceeded its statutory powers). To be sure, DVA

has discretion to decide whether to enter anyparticularhealth-care resource sharing

agreement, but only if it is a health-care resource sharing agreement. DVA cannot

invoke that discretion to justify entering into purely commercial leases or land-use

agreements that do not involve health-care resource sharing.

DVA erroneously argues that one court has held that the discretionary nature of

Section 8153 shields the Secretarys action from judicial review. Defs. Mot. at

11:14-20 (citing Gibbons v. Fronton, 533 F. Supp. 2d 449 (S.D.N.Y. 2008)). Gibbons

did not refuse to assess whether a particular lease was in fact a health-care resource

sharing arrangement but instead addressed whether DVA was liable for the negligence

of a primary-care contractor under the Federal Tort Claims Act. In doing so, the court

noted that [t]he VAs decision to enter a contract with an outside health-care provider i

clearly within the discretion granted to the VA in 8153(a)(1). 533 F. Supp. 2d at 456

Gibbons thus offers nothing more than dictum for the unremarkable proposition that

DVAs entry into a particular (statutorily authorized) health-care resource sharing

agreement is a matter of discretion.

DVA also relies onRapides Regional Medical Center v. Secretary, 974 F.2d 565

(5th Cir. 1992). Defs. Mot. at 8 n.10. That case involved a quintessential health-care

3DVAs argument that the definition of medical facilities in 38 U.S.C. 8101(3) is

relevant, see Defs. Mot. at 9, is baffling. Congress explicitly defined health-careresource in 8152(1), and 8153 authorizes only the sharing of health-careresources. Congress defined the resources subject to the sharing authority within thestatutes establishing the sharing authority itself.


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resource sharing agreement: an agreement between DVA and a private hospital to share

a sophisticated radiation therapy device for cancer patients. It did not involve a

challenge to DVAs authority to enter into the agreement in question. Rather, another

private hospital claimed that DVA should have submitted the agreement to competitive

bidding. Id. at 566-67. The Fifth Circuit was never presented with, and did not address

the central question in this case: if courts should review whether particular leases are

actually health-care sharing agreements and thus authorized under 8153.

DVA also suggests that statutory requirements of reports to Congress, like the one

in 8153(g), support the conclusion that Congress intended to foreclose judicial review.

Defs. Mot. At 10 n.13. But the inclusion of a congressional reporting requirement does

not determine whether a statute itself creates clear standards of review available to the

court. In fact, numerous courts have rejected this precise argument. See, e.g.,

Armstrong v. Bush, 924 F.2d 282, 291-92 (D.C. Cir. 1991) (holding agency action

subject to judicial review despite requirement that agency submit annual reports to

Congress);American Friends Serv. Comm. v. Webster, 720 F.2d 29, 44 (D.C. Cir. 1983)

(rejecting the argument that congressional oversight exempts agency action from judicia

review because it would create an enormous exception to judicial review: Congress

exercises oversight over all agencies, gets reports from many, and is often consulted by

the executive branch before specific actions are taken).

All of the cases on which DVA relies for general support of its argument that

judicial review is inappropriate are distinguishable. They involve agency conduct (a)

under a statutory grant of complete agency discretion, (b) in the absence of a clear

benchmark limit on the agencys power, or (c) in an area involving national security or

agency expertise. E.g.,Drakes Bay Oyster Co. v. Salazar, 2013 WL 451860, -- F. Supp

2d --, at *11 (holding that the express language and legislative history evince

Congresss intent to grant the Secretary complete discretion on the issue); Strickland

v. Morton, 519 F.2d 467, 472 (9th Cir. 1975) (holding that the land classification at issu

was not a clear instance of the Secretary acting without authority and directly contrary


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to legislative intent); Topgallant Grp., Inc. v. United States, 704 F. Supp. 265, 266

(D.D.C. 1998) (Procurement decisions based on military considerations are not subject

to review in the courts in the absence of gross impropriety, fraud, or bad faith.). None

of those circumstances are present here.

2. DVAs Interpretation of the Scope of Its Authority Is NotEntitled To Deference

DVA also argues that: (a) the Courts review of its decisions to enter into health-

care sharing agreements must be highly deferential underChevron; (b) its entry into

the challenged leases is presumed to be valid; and (c) its interpretation of 8153 must

prevail if reasonable. Defs. Mot. at 12-13. DVA is simply extracting isolated strand

of administrative law, divorced from their broader doctrinal framework. These

standards do not apply here because Plaintiffs claim is that certain leases are simply

beyond the scope of DVAs health-care sharing authority, as defined by clear and

unambiguous statutory language.4

a. The Statute is Unambiguous, so DVAs Interpretation IsIrrelevant

As noted in Section III.A, supra, under the first step of the Chevron framework,

DVAs interpretation of 8153 is not entitled to any deference because the statute is not

ambiguous. DVA glosses over this first step underChevron without any analysis. See

Defs. Mot. at 14 (asserting, with no further analysis, that 8151-53 use broad and

ambiguous terms). Even the cases on which DVA relies recognize this important first

step in the inquiry. See N.L.R.B. v. United Food & Commercial Workers Union, Local

23, AFL-CIO, 484 U.S. 112, 123, 108 S. Ct. 413, 98 L. Ed. 2d 429 (1987) (On a pure

question of statutory construction, our first job is to try to determine congressional

4DVA also attempts to invoke an arbitrary or capricious standard of review. Defs.

Mot. at 12:5. That standard applies, however, only to the exercise of discretionunquestionably delegated to the agency, not acts in excess of statutorily delegatedauthority, as even the cases cited by DVA make clear. See Motor Vehicle Mfrs. Assnof U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 42-43 (1983) (holdingthat the arbitrary and capricious standard prevents a court from setting aside anagency rule that is rational, based on consideration of the relevant factors andwithinthe scope of the authority delegated to the agency by the statute) (emphasis added).


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intent, using traditional tools of statutory construction. If we can do so, then that

interpretation must be given effect, and the regulations at issue must be fully consistent

with it.); Arent v. Shalala, 70 F.3d 610, 614-16 (D.C. Cir. 1995) (Chevron is

principally concerned with whether an agency has authority to act under a statute. Thus

a reviewing courts inquiry underChevron is rooted in statutory analysis and is focused

on discerning the boundaries of Congress delegation of authority to the agency.

(internal citation omitted)). And in other cases upon which DVA relies, the court

considered the agencys interpretation only after explicitly finding that the statute is

ambiguous. SeeBarnhart v. Walton, 535 U.S. 212, 224-25, 122 S. Ct. 1265, 152 L. Ed.

2d 330 (2002) (The statutes language is ambiguous. And the Agencys interpretation

is reasonable.);Holder v. Martinez Gutierrez, 132 S. Ct. 2011, 2018, 182 L. Ed. 2d 922

(2012) (holding that the relevant statute was silent on the relevant question and therefore

afforded at least two possible constructions).

b. Even if the Statute Were Ambiguous, DVA Is NotEntitled To Chevron Deference Because It Offers NoFormal Interpretation of 8153

Even if the Court were to find that 8153 is somehow ambiguous, Defendants

still would not be entitled to deference under the second prong ofChevron.Meadmake

clear that such deference is not appropriate unless the agency can demonstrate that it has

the general power to make rules carrying the force of law and that the challenged

action was taken in the exercise of that authority. Wilderness Socy, 353 F.3d at 1059

(internal quotation marks omitted). AlthoughMeaddoes not state with specificity wha

types of agency powers are indicative of authority generally to make rules carrying the

force of law, it provides guidance on the subject: Delegation of such authority may

be shown in a variety of ways, as by an agencys power to engage in adjudication or

notice-and-comment rulemaking, or by some other indication of a comparable

congressional intent. Id. at 1039 n.6 (quotingMead, 533 U.S. at 227).

Nothing in the Record indicates that DVAs interpretation of the health-care


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resource sharing authority was ever promulgated in a manner carrying the force of law.5

As noted, DVAs decisions to enter into ESAs are not subject to notice-and-comment

requirements (or any formal administrative process), so they do not warrant Chevron

deference. SeeMead, 533 U.S. at 230 (It is fair to assume generally that Congress

contemplates administrative action with the effect of law when it provides for a

relatively formal administrative procedure tending to foster the fairness and deliberation

that should underlie a pronouncement of such force.); Wilderness Watch, Inc. v. U.S.

Fish & Wildlife Serv., 629 F.3d 1024, 1035 (9th Cir. 2010) (evaluating the formality of

the administrative procedure that fostered the [agency action] when assessing level of

deference to grant agency interpretation). Moreover, the agency guidance contained in

the Record, such as interpretations found in VHA Directive 97-015 (AR 16-22), VHA

Directive 1660.01 (AR 23-58), VHA Handbook 1820.1 (AR 59-82) or VA Handbook

7401.3 (AR 83-88), and a 2008 memo on use of the WLA Campus (AR 147-150), are

prototypical informal agency materials that lack the force of law and do not warrant

Chevron-style deference. Wilderness Socy, 353 F.3d at 1068; see alsoWilderness

Watch, 629 F.3d at 1034 (By contrast, [i]nterpretations such as those in opinion

letterslike interpretations contained in policy statements, agency manuals, and

enforcement guidelines, all of which lack the force of lawdo not warrant Chevron-

style deference. (quoting Christensen v. Harris County, 529 U.S. 576, 587, 120 S. Ct.

1655, 146 L. Ed. 2d 621 (2000))).

Moreover, the challenged agreements themselves are akin to the type of individua

actions made by an agency that are not an exercise of a congressionally delegated

legislative function and do not bespeak the legislative type of activity that would

naturally bind more than the parties to the ruling. Wilderness Socy, 353 F.3d at 1067

(internal quotation marks omitted); see alsoHigh Sierra Hikers Assn v. Blackwell, 390

5The only regulation submitted in the Record, 38 C.F.R. 17.142, makes no mention

of Defendants interpretation of Section 8153 and instead merely delegates theSecretarys authority to enter to health-care resource sharing agreements to anundersecretary. AR 7.


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F.3d 630, 648 (9th Cir. 2004) (The Forest Service was not acting with the force of law

in this case because it was granting permits, not acting in a way that would have

precedential value for subsequent parties.). As such, DVAs proffered interpretation o

the health-care resource sharing authority is not entitled to deference underChevron.

c. DVAs Interpretation of 8153 Cannot Be Saved byResort To the Respect Sometimes Afforded ToAgency Interpretations underMeadand Skidmore

DVAs interpretation of 8153 does not warrant even the lesser respect sometimes

afforded informal agency guidance. See Defs. Mot. at 16:6-15. MeadandSkidmore call

for a level of respect that turns on the persuasiveness of the agencys interpretation as seen

in the the thoroughness evident in its consideration, the validity of its reasoning, its

consistency with earlier and later pronouncements, and all those factors which give it powe

to persuade. Mead, 533 U.S. at 228 (internal quotation marks omitted). DVAs

interpretation of 8153 lacks any such indicia of persuasiveness.

DVAs proffered construction of the statute is reflected in a January 15, 2008

memo, AR 147-150, and various internal guidance documents. The 2008 document

contains no discussion of the underlying statute or the rationale for DVAs

interpretation. It contains no discussion of the need for agreements under 8151-53 to

involve the sharing of health-care resources and repeatedly refers to a statutory

authorization for use of space agreements that does not appear in the statute.

Likewise, the internal guidance documents contain nothing but conclusory assertions

that 8153 authorizes DVA to lease space without regard to its relationship to health-

care services. See AR 26 (Enhanced sharing agreements for the use of VA space

(including parking, outdoor recreational facilities, and vacant land) are authorized under

38 U.S.C. Section 8153.) (August 3, 2000 VHA Directive); AR 46 (Sharing

agreements for the use of VA space, including parking, outdoor recreational facilities,

and vacant land, are authorized under 38 U.S.C. Section 8153 (see VHA Handbook

1820.1).) (October 11, 2007 VHA Handbook); AR 61 (Proposals and agreements to

share the use of VHA space (including parking, outdoor recreational facilities, and


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vacant land) are authorized under 38 U.S.C. 8153.) (March 7, 2005 VHA Handbook).

Nor does the Record reflect any demonstration of care by DVA in reaching its self-

serving interpretation of 8153. Defendants merely assert powers that do not appear in

the statute. As for the challenged leases, DVA simply asserts that each of them is

authorized under 8153 without any explanation why; and the Record contains no

evidence of any process by which DVA reached these conclusions, which are obviously

inconsistent with the fact that (as demonstrated in Plaintiffs summary judgment motion)

none of them involves the sharing of health-care resources. On this Record, DVAs ad

hoc commentary on, and application of, 8153 is entitled to no respect.

3. The Overwhelming Evidence Required to InferCongressional Acquiescence Is Not Present

DVAs final effort at avoiding the plain meaning of 8153 is to argue that

Congress implicitly accepted its interpretation of 8153 because Congress has

received reports from DVA regarding its use of the health-care sharing authority and

has not taken action to prohibit the challenged leases. Defs. Mot. at 18-20. Much

more would be required, however, before the Court could draw an inference that

Congress has acquiesced in DVAs interpretation of 8153 or the challenged leases.

In any event, DVA overstates the clarity of its reports to Congress, which do not

candidly explain that DVA uses the sharing authority in the manner it has for the

challenged leases.

As a starting point, there is a strong presumption that Congress intends judicial

review of administrative action, Pinnacle Armor, 648 F.3d at 718, and DVA has not

6Notably, the agency guidance documents do contain language suggesting that the

use of ESAs to sell DVA resources is appropriate only if the ESA relates to servicesor programs that DVA itself would operate as part of its medical facility. See AR 62(If [VHA space is offered for the benefit of non-veterans], then this type ofagreement must ensure that the service or space is within the scope of VHAsauthority . . . and be authorized by law for veterans.). Thus, it appears that DVAapproved the challenged leases notwithstanding internal agency guidance indicatingthat they were improper.


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cited a single case in which the Ninth Circuit found acquiescence.7 Thus, DVAs

burden in proving congressional acquiescence is very heavy: the Ninth Circuit has

characterized the sort of acquiescence argument made here by DVA as heroic

because the standard for a judicial finding of congressional acquiescence is extremely

high. Nw. Envtl. Advocates v. U.S. E.P.A., 537 F.3d 1006, 1022 (9th Cir. 2008).

Indeed, the Supreme Court requires the agency to meet an overwhelming evidence

standard, id. at 1022 (quotingBob Jones Univ. v. United States, 461 U.S. 574, 595,

600-01, 103 S. Ct. 2017, 76 L. Ed. 2d 157 (1983), andSolid Waste Agency of Northern

Cook County v. U.S. Army Corps of Engineers (SWANCC), 531 U.S. 159, 162, 121

S. Ct. 675, 148 L. Ed. 2d 576 (2001)), and establish that that Congress explicitly

considered the precise issue presented to the court,Morales-Izquierdo v. Gonzales,

486 F.3d 484, 493 (9th Cir. 2007) (en banc) (quotingBob Jones Univ., 461 U.S. at

600)). As demonstrated below, DVAs implication that acquiescence is a standard,

recognized exception to the presumption of reviewability misstates the law. In fact,

courts have rarely declined review on this ground, and a finding of congressional

acquiescence is so rare because courtsnot Congressapply the laws, and courts

recognize that Congress has many priorities higher than clarifying an unambiguous

statute. DVA has not cited, and cannot cite, a case where a court found acquiescence

in factual circumstances that are even remotely analogous to those present here.

Three Supreme Court decisions illustrate what is necessary to meet the heavy

burden and why DVA has not done so here. InBob Jones University, the Supreme

Court found acquiescence to an IRS interpretation of a statute. First, the Court

concluded that there was no question that the agencys interpretation was correct.

461 U.S. at 595. The Court then relied on the acquiescence argument to confirm that

7 DVA nonetheless concedes, as it must, that the Ninth Circuit has expressed greatskepticism about finding acquiescence. SeeMorales-Izquierdo v. Gonzales, 486 F.3d484, 493 (9th Cir. 2007) (en banc) (recognizing the sharp distinction betweenCongress deliberate acquiescence and its failure to express any opinion andrequiring overwhelming evidence that Congress explicitly considered the preciseissue presented to the court (internal quotation marks omitted)).


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conclusion, where Congress had held hearings on this precise issue, making it

hardly conceivable that Congressand in this setting, any Member of Congress

was not abundantly aware of what was going on, and where no fewer than 13 bills

[were] introduced to overturn the IRS interpretation and had all failed. Id. at 600-

01. Similarly, in United States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 132,

106 S. Ct. 455, 88 L. Ed. 2d 419 (1985), the Supreme Courtfound acquiescence to an

agency interpretation of a statute that failed to provide unambiguous guidance for

the [agency], where the correct interpretation was far from obvious. A finding of

acquiescence was appropriate only because the administrative construction [had]

been brought to Congress attention through legislation specifically designed to

supplant it, which included a House bill, a Senate bill amendment, and debate in

both Chambers of Congress that ended in the abandonment of efforts to narrow the

agencys interpretation. Id. at 136-37. By contrast, in SWANCC, 531 U.S. at 170, the

Court rejectedan agencys acquiescence argument despite some legislative history

showing Congress recognition of the agencys interpretation, including a failed

House bill that would have narrowed the agencys interpretation. The Court found

that the statute was clear and the agencys interpretation would have assumed that a

word in the statute did not have any independent significance. Id. at 172.

Here, DVA has not presented overwhelming evidence that Congress

explicitly considered the precise issue presented to the court, as would be

necessary to support an inference of congressional acquiescence. Morales-Izquierdo,

486 F.3d at 493. By contrast toBobJones, Congress has not held hearings on an

agencys correct interpretation of a statute and then failed to pass no fewer than 13

bills to overturn it. Nor is this a situation similar toRiverside Bayview Homes,

where multiple bills to supplant an agencys interpretation of a vague statute were

introduced and abandoned. DVA has introduced no evidence of any bills aimed at

correcting DVAs conduct that were introduced and failed. This case does not,

therefore, rise even to the level of congressional attention that existed in SWANCC,


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which the Court concluded was insufficient to support an inference of acquiescence.8

In any event, DVAs three examples of its communications with Congress

demonstrate that DVA has been anything but candid with Congress, at least with respect

to its use of 8153 for purely commercial leases unrelated to health-care on the WLA

Campus. First, DVA argues that its annual reports informed Congress that agreements

for the sharing of space . . . comprise a significant portion of VA ESAs and made

clear that the benefit provided to the VA medical program by an ESA is often revenue.

Defs. Mot. at 19:3-7. But, in its reports to Congress, DVA consistently describes the

space it has leased as medical space, AR 115, 116.30, 116.45, 116.58, 116.71-.72,

116.85-.86, 116.100, 116.111-.112, 116.124-.125 (emphasis added), or specialized

space, AR 101 (emphasis added). The reports describe the direct benefit from its

ESAs as making available to veterans certain essential services that have not been

readily obtainable at their local VA medical center. AR 116.005; see also AR 116.001

116.003, 116.015. These descriptions, at worst, affirmatively misled Congress about

how DVA was using the health-care resource sharing authority in some circumstances;

at best, they simply fail to disclose the true nature of the challenged leases.

Second, DVA suggests that testimony before DVAs oversight committees

provided Congress with further detailed information about the challenged

agreements. Defs. Mot.at 19-20. The testimony on which DVA relies, however, is

not from a DVA official but from the Government Accountability Office.

Additionally, the testimony was part of a report on a GAO initiative regarding the

management of capital assets, not an examination of the legal limits on DVAs

authority to dispose of property.

8 DVAs other cases also do not support its position. Motor Vehicle Mfrs. Assn v.State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 45, 103 S. Ct. 2856, 77 L. Ed. 2d 443(1983), andCape Cod Hosp. v. Sebelius, 630 F.3d 203, 214 (D.C. Cir. 2011), rejecteda finding of acquiescence. Haig v. Agee, 453 U.S. 290, 300-01, 101 S. Ct. 2766, 69L. Ed. 2d 640 (1981), involved formal regulations that were promulgated pursuant to

broad statutory authority; the Court held that the regulations fell within that authority;and as confirmation of that interpretation, the Court merely relied on the fact that theCongress, knowing of the regulation, had re-enacted the broad authority withoutchange. None of those circumstances are present here.


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Third, DVA argues that [m]embers of Congress have even received

notification before DVA exercised its discretion to enter into specific ESAs. Defs.

Mot. at 20. But the notification on which DVA relies relates only to its agreement

with the Brentwood School, and some members of Congress sent DVA a letter

raising concerns about that use of 8153. AR 246.5, 246.7. Although DVA assured

the members of Congress that its general counsel reviewed the Brentwood

agreement and determined that VA had the authority pursuant to 38 U.S.C. 8153 to

enter into the agreement, DVA also noted both that it was renegotiating the terms of

the agreement in light of the review and that new directives governing the use of

8153 were being developed. AR 246.24. DVA failed to provide any analysis or

justification for its conclusion that the agreement was legal or any indication of what

the new guidelines would say; the clear implication, however, was that DVA would

behave differently in the future. The Record contains no information suggesting that

the members of Congress followed up further or were notified about the new policies

or changes to the contract referenced in the letter.

In short, the notification DVA purportedly provided to Congress was far from a

clear and full accounting of how it was using the sharing authority, and the Record

establishes that Congress never took formal action, in the form of either hearings on this

specific issue or proposed legislation to address DVAs use of the statute. There is

therefore no basis for this Court to invoke congressional acquiescence.

IV. CONCLUSIONFor the foregoing reasons, Plaintiffs respectfully submit that the Court should

deny DVAs motion for summary judgment.

Dated: May 10, 2013. ARNOLD & PORTER LLP

By: /s/ John C. UlinJohn C. UlinAttorne s for Plaintiffs


pls opp to msj _125

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