valentini v shinseki: pls msj
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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 NOTICE OFMOTION AND MOTION FORSUMMARY JUDGMENT;MEMORANDUM OF POINTS ANDAUTHORITIES IN SUPPORTTHEREOF
NO HEARING DATE
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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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PLS. NOTICE OF MOT. AND MOT. FOR SUMM. J.
NOTICE OF MOTION AND MOTION
TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:
PLEASE TAKE NOTICE that pursuant to the Courts February 13, 2013 Order
(Dkt. No. 111), Plaintiffs, by and through their undersigned counsel, hereby move
this Court for summary judgment pursuant to Federal Rule of Civil Procedure 56(a).
This Motion is based upon this Notice of Motion and Motion, the attached
Memorandum of Points and Authorities, the Administrative Record, the prior Orders
of this Court, the complete files and records in this action, and such other written or
oral arguments that may be presented to the Court.
This Motion is made following a conference of counsel held pursuant to Local
Rule 7-3, which took place on March 22 and April 25, 2013.
Plaintiffs respectfully request the opportunity for oral argument once the
briefing on the cross-motions for summary judgment is completed.
Dated: May 10, 2013. ARNOLD & PORTER LLP
By: /s/ John C. UlinJohn C. UlinAttorneys for Plaintiffs
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TABLE OF CONTENTS
Page
I. INTRODUCTION ............................................................................................... 1II. BACKGROUND ................................................................................................. 2
A. Statutory Framework Governing the Challenged Leases ......................... 21. Health-Care Resource Sharing Authority ....................................... 32. Enhanced Use Lease Authority ...................................................... 43. Restrictions on Disposition of the WLA Campus .......................... 5
B. The Administrative Record ....................................................................... 5C. Plaintiffs APA Claim ............................................................................... 8
III. LEGAL STANDARD ......................................................................................... 8IV. ARGUMENT ....................................................................................................... 9
A. The Challenged Leases Are Void Because They ExceedUnambiguous Limits on DVAs Power To Share Health-CareResources ................................................................................................ 101. Congress Has Unambiguously Defined the Phrase
Health-Care Resource ............................................................... 112. Reading 8153 to Authorize the Challenged Leases
Would Be Inconsistent with the Broader StatutoryStructure Regulating Use of DVA Property ................................. 13
3. Legislative History Confirms that the Challenged LeasesAre Contrary to Congresss Intent ................................................ 14
4. The Challenged Leases Exceed DVAs Authority toShare Health-Care Resources ....................................................... 16
B. Even Assuming the ESA Statute is Ambiguous, DVAsDecisions Are Not Due Any Deference .................................................. 21
V. CONCLUSION ................................................................................................. 22
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TABLE OF AUTHORITIES
Page(s)FEDERAL CASES
Boise Cascade Corp. v. U.S. E.P.A.,942 F.2d 1427 (9th Cir. 1991) ........................................................................... 15
Chevron U.S.A. Inc. v. Natural Resources Defense Council,467 U.S. 837, 104 S. Ct. 2778, 81 L. Ed. 2d 694 (1984) ........................ 9, 10, 21
United States v. Lacy,119 F.3d 742 (9th Cir.1997) .............................................................................. 12
United States v. Mead Corp.,533 U.S. 218, 121 S. Ct. 2164, 150 L. Ed. 2d 292 (2001) ............................ 9, 21
United States v. Wahid,614 F.3d 1009 (9th Cir. 2010) ........................................................................... 14
Whitman v. Am. Trucking Assn,531 U.S. 457, 121 S. Ct. 903, 149 L. Ed. 2d 1 (2001) ...................................... 22
Wilderness Socy v. U.S. Fish & Wildlife Serv.,353 F.3d 1051 (9th Cir. 2003) (en banc),amended on rehg en banc on other grounds,360 F.3d 1374 (9th Cir. 2004) ....................................................... 8, 9, 10, 21, 22
Wilson v. C.I.R.,705 F.3d 980 (9th Cir. 2013) ....................................................................... 11, 15
STATUTES,RULES ANDREGULATIONS
38 C.F.R. 17.142 ......................................................................................................... 6
5 U.S.C. 701-708 ...................................................................................................... 8
5 U.S.C. 706(2)(A)............................................................................................... 8, 9, 10
5 U.S.C. 706(2)(C) ................................................................................................... 8, 10
38 U.S.C. 1701(5) ................................................................................................. 3, 1238 U.S.C. 1701(6) ................................................................................................. 3, 12
38 U.S.C. 1782 ...................................................................................................... 3, 12
38 U.S.C. 1783 ...................................................................................................... 3, 12
38 U.S.C. 5022 .......................................................................................................... 21
38 U.S.C. 8122 .......................................................................................................... 21
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38 U.S.C. 8151 ...................................................................................................... 3, 11
38 U.S.C. 8151-8153 .......................................................................................passim
38 U.S.C. 8152 ............................................................................................................ 3
38 U.S.C. 8152(1) ......................................................................................... 11, 12, 13
38 U.S.C. 8153 ..........................................................................4, 6, 10, 13, 14, 15, 21
38 U.S.C. 8153(a) ..................................................................................................... 12
38 U.S.C. 8153(a)(1) ................................................................................................... 4
38 U.S.C. 8153(a)(3)(A) ........................................................................................... 12
38 U.S.C. 8153(a)(3)(B)(ii) ...................................................................................... 12
38 U.S.C. 8161-69 .............................................................................................. 2, 15
38 U.S.C. 8162 ............................................................................................................ 5
38 U.S.C. 8162(a)(2) ................................................................................................... 5
38 U.S.C. 8162(a)(2)(i)-(ii) ......................................................................................... 4
38 U.S.C. 8162(a)(2)(B) ................................................................................. 4, 13, 15
38 U.S.C. 8162(c)(1) ................................................................................................... 2
38 U.S.C. 8163 ............................................................................................................ 5
38 U.S.C. 8165(a)(1) ................................................................................................... 4
Consolidated Appropriations Act, 2008,Pub L. No. 110-161, 224(c), 121 Stat. 2272 (2007) ................................... 5, 15
Honoring Americas Veterans and Caringfor Camp LeJeune Families Act of 2012(Pub. L. No. 112-154, 126 Stat. 1165 (2012) ................................................ 5, 15
Local Rule 7-3 ................................................................................................................ 8
Priority VA Health Care For Persian Gulf Veterans,Pub. L. No. 103-210, 3(a), 107 Stat. 2497 (1993) .......................................... 16
Title 38 of the U.S. Code ................................................................................... 2, 14, 15
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)(A)(i)-(iii), repealed 2012) .......................... 4, 13
Veterans Benefits Programs Improvement Act of 1991,Pub. L. No. 102-86, 401(a), 105 Stat. 417 (1991) ............................................ 5
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OTHERAUTHORITIES
S. Rep. 104-372 (1996) ................................................................................................ 16
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MEMORANDUM OF POINTS AND AUTHORITIES
I. INTRODUCTIONCongress granted the Department of Veterans Affairs (DVA) authority to
enter into agreements to share health-care resources with third parties pursuant to 38
U.S.C. 8151-53. Congress made crystal clear in both its statement of congressional
purpose and the statutory definitions that this authority to enter into health-care
resource sharing agreements extends only to services, equipment, and space related
directly to health care for veterans. DVA has, however, elected to ignore Congresss
intent and to instead treat these provisions as a blanket grant of authority to lease its
property to any entity for any purpose, including ones that have nothing at all to do
with providing health care to veterans. DVAs approach is simple: if it calls an
agreement a health-care resource sharing agreement, it is one, regardless of the terms
or purpose of the agreement. Examples of these mis-titled health-care resource
sharing agreements include leases that allow significant portions of DVAs West Los
Angeles Campus (WLA Campus) to be used as:
a private schools athletic complex;
a luxury hotels laundry service; a movie studios set storage facility; and a baseball stadium for UCLA.
These uses deny veterans access to the land and prevent DVA from using the land for
purposes that benefit veterans. That, of course, is precisely what Congress sought to
avoid by carefully circumscribing DVAs authority.
DVAs use of the sharing authority in this manner is contrary to the plain
meaning of the health-care resource sharing statute. If permitted, moreover, it would
render obsolete Congresss separate grant to DVA of Enhanced Use Lease (EUL)
authority, which expressly empowered the agency to lease its property to third parties
for commercial purposes unrelated to services for veterans if the revenue generated wil
improve veteran services. Indeed, DVAs use of its sharing authority at the WLA
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Campus makes a mockery of the comprehensive statutory framework Congress enacted
to regulate use of DVA land: if Congress had intended the health-care resource sharing
statute to authorize DVA to lease its property in whatever manner DVA saw fit, the
numerous substantive and procedural limitations on DVAs authority to lease its
property found throughout Title 38 of the U.S. Code would be meaningless and
superfluous.
This Court was correct when it stated that the DVAs land-use agreements
entered into pursuant to ESAs that do not provide for the sharing of health-care
resources were unauthorized and resulted in lost access to space and opportunities
that benefit veterans on the WLA Campus. March 16, 2012 Order Granting in Part
and Denying in Part Defendants Motion to Dismiss at 11 (Dkt. No. 70) (March 16
Order). Plaintiffs now ask the Court to enter summary judgment that DVAs
decisions to enter into commercial land deals on the WLA Campus were made in
excess of statutory authority.
II. BACKGROUNDA. Statutory Framework Governing the Challenged LeasesIn Title 38 of the U.S. Code, Congress specifies the manner in which DVA
may operate and dispose of property within its control. Congress authorizes three
principal types of agreements through which DVA may use or dispose of its
properties: (1) health-care resource sharing agreements (referred to by DVA as
Enhanced Sharing Agreements ESAs), 38 U.S.C. 8151-53; (2) EULs, 38 U.S.C.
8161-69; and (3) short-term outleases (which are not at issue in this case). Thus,
Congress expressly provided that health-care resource sharing agreements and EULs
are differenttypes of agreements. Additionally, Congress has specifically limited
DVAs power to operate and dispose of the WLA Campus by expressly barring the
use of EULs on that property. See id. 8162(c)(1).
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1. Health-Care Resource Sharing AuthorityThe current scope of DVAs sharing authority took shape in 1996, when
Congress enacted legislation to enhance DVAs sharing authority under 38 U.S.C.
8151-8153 by eliminating prior formulations that limited that authority to specialty
medical services and to agreements between DVA and specified medical providers.
Section 8151, entitled Statement of congressional purpose, provides:
It is the purpose of this subchapter to strengthen the medical
programs at Department facilities and improve the quality of
health care provided veterans under this title by authorizing
the Secretary to enter into agreements with health-care
providers in order to share health-care resources with, and
receive health-care resources from, such providers while
ensuring no diminution of services to veterans.
38 U.S.C. 8151 (emphasis added).
Section 8152 defines the terms used in 38 U.S.C. 8151-8153 and provides,
in relevant part: The term health-care resource includes hospital care and medical
services (as those terms are defined in section 1701 of this title), services undersections 1782 and 1783 of this title, any other health-care service, and any health-care
support or administrative resource. 38 U.S.C. 8152.1 Thus, by statute, Congress
has specifically defined health-care resources, consistent with its plain meaning and
common usage, to include such things as hospital care and medical services for
veterans and their families.
1 38 U.S.C. 1701(5) defines hospital care as including such services as medicalservices rendered in the course of the hospitalization of any veteran, and mentalhealth services . . . and training for the members of the immediate family of a veteranto assist with the veterans rehabilitation. 38 U.S.C. 1701(6) defines medicalservices as including surgical, dental, optometric, podiatric, preventative health, andother such services. 38 U.S.C. 1782 provides for counseling, training, and mentalhealth services for immediate family members and caregivers of veterans, and 38U.S.C. 1783 provides for bereavement counseling.
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Section 8153, entitled Sharing of health-care resources, provides, in relevant
part:
To secure health-care resources which otherwise might not be
feasibly available, or to effectively utilize certain other health-
care resources, the Secretary may, when the Secretary
determines it to be in the best interest of the prevailing
standards of the Department medical care program, make
arrangements, by contract or other form of agreement for the
mutual use, or exchange of use, of health-care resources
between Department health-care facilities and any health-care
provider, or other entity or individual.
38 U.S.C. 8153(a)(1).
2. Enhanced Use Lease AuthorityAt the time DVA entered into the challenged leases, it was authorized to lease
DVA land through an EUL if the Secretary determined that (1) at least part of the
property under the lease will be to provide appropriate space for an activity
contributing to the mission of DVA; (2) the lease will not be inconsistent with andwill not adversely affect the mission of DVA; and (3) the lease will enhance the use
of the property . . . . 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)(A)(i)-(iii), repealed 2012). Alternatively, DVA could enter into an EUL
if applying the consideration under such a lease to the provision of medical care and
services would result in a demonstrable improvement of services to eligible veterans
in the geographic service-delivery area within which the property is located. Id.
(former 38 U.S.C. 8162(a)(2)(B), repealed 2012). In either case, [f]unds received
by the Department under an enhanced-use lease had to be deposited in the
Department of Veterans Affairs Medical Care Collections Fund. 38 U.S.C.
8165(a)(1). The EUL provisions, which do not limit uses under an agreement to
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health-care resources, protect veterans interests by imposing substantial procedural
requirements, including notice-and-comment requirements, which are not required
under the health-care resource sharing authority. Compare 38 U.S.C. 8163 with id.
8151-53.
These provisions remained largely unchanged until well into the pendency of
this litigation, when Congress enacted the Honoring Americas Veterans and Caring
for Camp LeJeune Families Act of 2012 (Pub. L. No. 112-154, 126 Stat. 1165
(2012)), substantially modifying the EUL authority. Although the notice-and-
comment and other procedural requirements in 38 U.S.C. 8163 remain unchanged,
section 211(b) amended 38 U.S.C. 8162(a)(2) to provide that EULs are now
authorized only for the provision of supportive housing. Thus, EULs are now
authorized only for the purpose of providing supportive housing to homeless
veterans, but they remain subject to the notice-and-comment and robust reporting and
oversight requirements that have always applied to EULs.
3. Restrictions on Disposition of the WLA CampusCongress has repeatedly recognized that the WLA Campus is a unique property
within the collection of properties managed by DVA. It was donated to thegovernment for the express purpose of benefiting veterans, and, when Congress
enacted the EUL authority in 1991, it expressly prohibited the use of EULs on a
portion of the WLA Campus. See Veterans Benefits Programs Improvement Act of
1991, Pub. L. No. 102-86, 401(a), 105 Stat. 417 (1991). In 2008, Congress
amended 8162 to prohibit DVA from entering into EULs on any portion of the
WLA Campus. See Consolidated Appropriations Act, 2008, Pub L. No. 110-161,
224(c), 121 Stat. 2272 (2007).
B. The Administrative RecordThe administrative record (AR or the Record) produced by Defendants is
said to contain all of the material considered, directly or indirectly, in deciding to
enter into the agreements that are the subject of Plaintiffs APA claim. April 10,
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2013 Declaration of Ralph Tillman 3 (Dkt. No. 115-1).2 A review of the Record
reveals that, despite the statutory framework cabining DVAs ability to enter into
agreements encumbering the WLA Campus, DVA has interpreted 8153 to authorize
it to enter into a series of so-called ESAs, through which DVA has diverted a
substantial portion of the WLA Campus to uses that are unrelated to the provision of
health care.
The Record begins with Selected Legal Authorities, including portions of the
health-care resource sharing authority (AR 1-6), one federal regulation, 38 C.F.R.
17.142 (AR 7), two statutes relating to the WLA Campus and its Master Plan (AR 8-
9), and excerpts from the Federal Register relating to the Master Plan (AR 10-14). The
next section, entitled, Agency Guidance, includes various non-binding instructions
developed by DVA concerning exercise of the health-care resource sharing authority
(AR 16-88). This is followed by annual reports to Congress on DVAs use of the
health-care resource sharing authority (AR 89-140), one memorandum relating to
compensated work therapy (AR 141-146), one legal memorandum relating to
Statutory Land Restrictions on the WLA Campus (AR 147-150), excerpts from the
Master Plan (AR 151-89), and documents related to specific ESAs that encumber theWLA Campus (AR 190-1700). The Record includes documents indicating the
following ESAs or related arrangements:
2 Defendants filed the initial version of the Record, numbered 1-1046, on October 22,2012. (Dkt. No. 96.) Defendants then voluntarily supplemented the Record on
November 20, 2012 (one day before the filing of Plaintiffs Motion to Supplement theRecord [Dkt. No.100]) with a collection of documents numbered 116.001-116.139,413.001-413.073, 790.001-128, and 1010.001-1010.175. (Dkt. No. 98.) In responseto this Courts order requiring further supplementation of the Record (Dkt. No. 108),on February 19, 2013 Defendants added documents numbered 878, 881.1-881.5,894.1-894.61, 1010, 1041.1, 1046-1700. (Dkt. No. 112.) Finally, Defendantsvoluntarily supplemented the Record again on April 10, 2013 with documentsnumbered 246.1-246.28. (Dkt. No. 115.) Hereinafter all cites to the administrativerecord will begin with AR and be followed by the page numbers applied by theDefendants.
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ESA Name AR Description
Brentwood School 191-290 ESA with private school so the school could buildand operate athletic facilities on the WLA Campusfor use by the school
Rancho Santa Ana
Botanical Garden
291-331 ESA with non-profit to manage garden located on
the WLA Campus and the Compensated WorkTherapy program associated with the garden
Sodexho MarriotLaundry Services
332-381 ESA with corporation to operate the laundry facilityon the WLA Campus to serve hotels and other
businesses in the surrounding area
UC Regents 382-446 ESA with university so the university could buildand operate a baseball stadium on the WLA Campusfor use by its intercollegiate baseball team
Salvation ArmyBuilding 212
447-521 ESA with non-profit to operate transitional andemergency housing programs in a building on theWLA Campus
Salvation ArmyBuilding 207
522-611 ESA with non-profit to operate transitional andemergency housing programs in a building on theWLA Campus
Twentieth CenturyFox Television
612-667 ESA with corporation to use building on the WLACampus to store film and other equipment
US Vets Initiative 668-823 ESA with non-profit to manage golf course locatedon the WLA Campus and the Compensated WorkTherapy program associated with the golf course
Veterans Park
Conservancy
824-876 ESA with non-profit to create a park on the WLA
Campus used for private events and other purposesWestside BreakersSoccer Club
877-917 ESA with private club to utilize athletic facilitiesand parking on the WLA Campus for soccer
practice and games
Westside Services 918-1055 ESA with corporation to manage and operateparking lots on the WLA Campus
TMC LLC 1056-1084 ESA with corporation to operate a farmers marketon the WLA Campus
RichmarkEntertainment
1085-1316 ESA with corporation to manage and operatetheaters on the WLA Campus for theatrical andmusical productions open to the public and for
private events
Filming
Agreements
1317-1699 Eleven (11) ESAs with production companies tofilm movies, television shows, and advertisementson the WLA Campus
Barrington Park 1689-1700 Agreement with the City of Los Angeles to operate,rent-free, a city park and parking on the WLACampus
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The agreements listed above, excepting the agreements with the Salvation Army, US
Vets Initiative, and Rancho Santa Ana Botanical Garden,3 are the challenged leases.
The challenged leases encumber and impair veterans access to and use of 90.39 of the
388-acres WLA Campus, nearly a quarter of the campus.
C. Plaintiffs APA ClaimPlaintiffs move for summary judgment in their favor on the ground that the
challenged leases violate the Administrative Procedure Act (APA) and are
therefore void, because they constitute final agency action in excess of DVAs
authority or otherwise contrary to law. 5 U.S.C. 706(2)(A) & (C). The Record
reveals that DVA relied on its health-care sharing authority under 38 U.S.C. 8151-
53 to justify the challenged leases. This sharing authority allows DVA to encumber
the WLA Campus, but only via agreements that are for . . . the mutual use, or
exchange of use, ofhealth-care resources. Id. at 8153 (emphasis added). The
challenged leases have nothing to do with health-care resources, so Plaintiffs now ask
the Court to void the challenged leases and enjoin future misuse of DVAs authority
to share health-care resources.4
III. 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
3 Plaintiffs counsel advised counsel for Defendants that Plaintiffs were not challeng-ing these agreements during the meet-and-confer process under Local Rule 7-3.4 As the Court has also previously held, Plaintiffs have standing to bring this claim
because Plaintiffs have suffered injury, see March 16 Order at 12, and the Court canredress the injury by declaring the challenged leases unlawful, seeid. at 14. Thefactual allegations on which the Courts holding rests have been establish bydeclarations in the record. Dkt. Nos. 64-66.
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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, 467 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 forceof law, andthat the agency interpretation claiming deference was promulgated in the
exercise of that 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 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).
IV. ARGUMENTThe central issue in this case is whether the challenged leases fall within
DVAs power to shar[e] health-care resources. They do not. DVAs decisions to
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enter into the challenged leases exceeded its statutory authority and were therefore
unlawful. DVA may enter into sharing agreements under 38 U.S.C. 8151-53 only
ifthey relate to the provision of health-care services to veterans, and the challenged
leases have nothing to do with providing health care to veterans. See March 16 Order
at 11 (finding that the land use statutes make it clear that Congresss intention was to
ensure that property leased to third parties is primarily used to benefit veterans).
Because Congresss intent that ESAs must involve the sharing of health-care
resources is clear from the statutory text, that is the end of the matter, Wilderness
Socy, 353 F.3d at 1059 (quoting Chevron, 467 U.S. at 842), and DVAs decisions to
enter into the challenged leases, which have nothing to do with health-care resources,
should be set aside. See 5 U.S.C. 706(2)(A)&(C).
Even assuming, for the sake of argument, that the health-care resource sharing
statute is ambiguous, DVAs decisions are not entitled to any deference because they
were not made in the exercise of delegated authority to make rules carrying the force
of law, and the Record contains no supportother than bald assertions with no
supporting legal analysisfor DVAs position that 38 U.S.C. 8153 authorizes it to
enter into any agreement with any entity for any purpose. Accordingly, the Courtshould resolve the ambiguity through normal means of statutory construction, and the
only reasonable reading of the statute is that the agreements must relate to provision
of health care.
A. The Challenged Leases Are Void Because They ExceedUnambiguous Limits on DVAs Power To Share Health-CareResources
The scope of DVAs power to share health-care resources is unambiguous.
Simply put, DVA may arrange for DVA and a third party to mutually use or exchange
the use of resources related to the provision of health care. DVA may not enter into
traditional commercial leases, which dispose of land otherwise dedicated for the direct
benefit of veterans in exchange for rent. Thus, the challenged leases plainly exceed the
scope of DVAs authority and must be voided.
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1. Congress Has Unambiguously Defined the Phrase Health-Care Resource
Congress granted DVA authority to share health-care resources but went to
great pains to set an outer boundary to that authority, providing clear and unambiguous
instructions as to what types of resources DVA may share. Specifically, Congress mad
clear that, although DVA has considerable discretion to decide whether and when to
share health-care resources, that discretion extends only to agreements that are relate
to provision of health care. The plain text and statutory structure convey that Congress
did not intend to give DVA blanket discretion to enter into any lease with any entity for
any purpose, including commercial enterprises wholly unrelated to the provision of
health care, so long as the lease generated revenue for DVA. See Wilson v. C.I.R., 705
F.3d 980, 987-88 (9th Cir. 2013) (The first step in statutory construction is examining
the language of the specific provision at issue, as well as the structure of the statute as a
whole, including its object and policy. (internal quotation marks omitted)).
Congress explicitly stated that it authorized DVA to enter into health-care
resource sharing agreements to strengthen the medical programs at Department
facilities and improve the quality of health care provided veterans through agreementwith health-care providers in order to share health-care resources with, and receive
health-care resources from, such providers while ensuring no diminution of services to
veteran. 38 U.S.C. 8151 (emphasis added).
Congress then proceeded to define the health-care resources that DVA is
authorized to share, leaving no doubt that the kind of resource that can be shared is, as
plain usage (and common sense) would suggest, a resource related to the provision of
health care: The term health-care resource includes hospital care and medical
services (as those terms are defined in section 1701 of this title), services under section
1782 and 1783 of this title, any other health-care service, and any health-care support o
administrative resource. 38 U.S.C. 8152(1). Hospital care and medical care are
thus, examples of resources that constitute a health-care resource, and they are
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defined consistent with their plain meaning. Hospital care includes prototypical
aspects of health care like medical services rendered in the course of the
hospitalization and mental health services, 38 U.S.C. 1701(5), as does medical
services, which includes medical examination, treatment, and rehabilitative services,
38 U.S.C. 1701(6). The other cross-references in the definition are to provisions that
address family mental health counseling and training, 38 U.S.C. 1782, and
bereavement counseling, 38 U.S.C. 1783, both of which are related to care and
treatment of veterans. Both support and administrative resources can be health-
care resources only if they are health-care support or administrative resources and
thus relate to hospital care or medical services, e.g., a health-care support resource
could be a laundry facility that is used to wash bedding used in a hospital, while a
health-care administrative resource could be a digital filing system for medical records
For resources to be health-care resources, they must be of the same kind as
hospital care, medical care, health-care service, and related health-care support
and administrative resources. See United States v. Lacy, 119 F.3d 742, 748 (9th
Cir.1997) (holding that, under the canon of statutory construction ejusdem generis, a
general term following more specific terms means that the things embraced in thegeneral term are of the same kind as those denoted by the specific terms). All of the
terms included in the definition thus relate exclusively to physical and mental health-
care or rehabilitation services for veterans and their relatives.
Congress then authorized the Secretary to make arrangements . . . for the mutua
use, or exchange of use, ofhealth-care resources between Department health-care
facilities and any health-care provider, or other entity or individual. 38 U.S.C.
8153(a). Congress thus limited DVAs authority under 8153(a) to agreements
involving health-care resources, as defined in 8152(1).5
The plain language,
5 Section 8153(a)(3) sets forth special procedures for acquir[ing] certain health-careresources, including a commercial service, the use of medical equipment or space, orresearch, 38 U.S.C. 8153(a)(3)(A), and authorizes the Secretary to establish special
procedures that are subject to public comment when DVA intends to procure thehealth-care resources from certain entities, 38 U.S.C. 8153(a)(3)(B)(ii). Although
(Footnote Contd on Following Page)
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structure, and articulated purpose of the health-care resource sharing statute thus make
clear that Congress intended that such agreements would involve only resources that ar
directly related to providing health care and treatment to veterans and did not intend to
authorize DVA to encumber DVA resources by entering into purely commercial land
deals that have nothing at all to do with the provision of such care to veterans.
2. Reading 8153 to Authorize the Challenged Leases Would BeInconsistent with the Broader Statutory Structure RegulatingUse of DVA Property
A contrary reading of 8153 would also be inconsistent with the overall statutor
framework that Congress has created for DVAs management of DVA land generally
and the WLA Campus specifically. Congress included a provision in the EUL statute
that explicitly authorized commercial land deals that do not directly relate to providing
health care if DVA determines that the revenue generated will support DVAs broader
mission of providing care to veterans. See Veterans Millennium Health Care and
Benefits Act, Pub. L. No. 106-117, Title II, 208(a), (b), 113 Stat. 1567 (1999) (forme
38 U.S.C. 8162(a)(2)(B)) (authorizing EUL if applying the consideration under such
a lease to the provision of medical care and services would result in a demonstrable
improvement of services to eligible veterans in the geographic service-delivery area).Reading 8153 to authorize DVA to enter into the challenged leases would require an
assumption that Congress intended to create two distinct processes through which the
agency can accomplish exactly the same endentering into a purely commercial land
deal that provides no direct health-care benefit to veterans but raises revenue for the
agencybut included explicit authorization, and imposed specific procedural and
substantive conditions, with respect to only one of the two.
(Footnote Contd From Previous Page)
this provision does not apply here because none of the challenged leases involve theacquisition of health-care resources, the references to commercial service, medicalequipment and space, and research in subsection (a)(3)(A) establish that they mayqualify as a health-care support or administrative resource, 38 U.S.C. 8152(1). Aswith other such support or administrative resources, however, they satisfy thedefinition of health-care resources only if they are health-care support oradministrative resources, i.e., related to the provision of health care.
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Moreover, if 38 U.S.C. 8153 is read to authorize DVA to enter into whatever
land deals it desires simply because the revenue supports DVAs operations, the EUL
statute would be superfluous: There is no reason why DVA would ever choose to use
the EUL authority, with its notice-and-comment requirement, strict limitations on how
revenue generated by a lease can be used, and specific and onerous standards for
approving an agreement, if it could circumvent all of those requirements simply by
entering into the same agreement, calling it a health-care resource sharing agreement,
and citing 8153. The EUL statute demonstrates that Congress knew how to
specifically authorize DVA to enter into commercial leases for revenue-generating
purposes and that it did so in a manner that is inconsistent with reading its separate
authorization of health-care resource sharing agreements to cover such purely
commercial leases. See, e.g., United States v. Wahid, 614 F.3d 1009, 1014 (9th Cir.
2010) ([W]e abide by the principle that where Congress includes particular language i
one section of a statute but omits it in another section of the same Act, it is generally
presumed that Congress acts intentionally and purposely in the disparate inclusion or
exclusion. (internal quotation marks omitted)).
In fact, the comprehensive statutory scheme that Congress enacted regulatingDVAs ability to lease its property to third parties would be completely undermined if
8153 were read as a blanket delegation of authority to lease its property however it
sees fit. Part VI of Title 38 is entitled Acquisition and Disposition of Property, and
every other provision in Part VI related to disposition of property would be
meaningless if 8153 were read to authorize DVA to enter into the challenged leases.
Reading 8153 to authorize the challenged leases would subvert that clear
congressional intent and must therefore be rejected.
3. Legislative History Confirms that the Challenged Leases AreContrary to Congresss Intent
Although resort to legislative history is unnecessary because the plain language
and structure of the statute unambiguously establish Congresss intent, the legislative
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history of both 38 U.S.C. 8151-53 and 8161-69 confirm that Congress did not
intend to authorize DVA to enter into purely commercial land deals through 8153.
See Wilson, 705 F.3d at 988 (holding that courts may look to legislative history to
confirm congressional intent).
In 2007, Congress stripped DVA of any power to enter into EULs covering the
WLA Campus. See Pub. L. No. 110-161, 224(a). Prior to that, the EUL power
explicitly authorized DVA to lease certain portions of the WLA Campus for uses
unrelated to providing health-care to veterans in exchange for rent and use the rents to
fund its activities. If 8153 authorized DVA to enter into exactly the same sort of
agreements, as health-care resource sharing agreements, then stripping DVA of its
power to enter into EULs on the WLA Campus would have been a meaningless act.
SeeBoise Cascade Corp. v. U.S. E.P.A., 942 F.2d 1427, 1432 (9th Cir. 1991) (Under
accepted canons of statutory interpretation, we must interpret statutes as a whole, givin
effect to each word and making every effort not to interpret a provision in a manner tha
renders other provisions of the same statute inconsistent, meaningless or superfluous.)
Moreover, just last year, Congress overhauled the EUL authority, removing the
only explicit authorization in Title 38 for DVA to enter into purely commercial leases tgenerate general revenue for DVA (former 8162(a)(2)(B)) and replacing it with a
requirement that EULs may be used only for the purpose of providing supportive
housing for homeless veterans. Pub. L. No. 112-154, 211(b). Again, this demonstrate
that Congress knew both how to authorize DVA to lease underutilized property for
purposes unrelated to veteran health-care to generate additional operating revenue and
how to repeal that authority. This underscores even further that reading 8153 to
authorize any and all leases of DVA property would undermine clear congressional
intent, as revealed through the structure and history of the relevant statutory scheme.
Likewise, the legislative history of the 1996 amendments to 8151-53
confirms that Congress intended that any agreements made under 8153 must relate
directly to health care for veterans. Prior to the 1996 amendment, Congress had
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authorized DVA to share specialized medical resources only with other health-
care facilities, . . . research centers, or medical schools and health-care resources
only with state home facilities. Priority VA Health Care For Persian Gulf
Veterans, Pub. L. No. 103-210, 3(a), 107 Stat. 2497 (1993). Eventually, Congress
recognized that those limits on the sharing authority unwisely prohibited DVA from
benefiting from sharing resources that support its provision of health care, such as
various risk assessment, accounting, or other nonmedical services, or joint efforts
with other health-care providers, such as health maintenance organizations,
insurance carriers, individual physicians, or other individual care providers. S. Rep.
104-372 at 21 (1996).
The 1996 amendments were intended to ease these various restrictions by
authorizing VA to enter into agreements with any non-VA health care providerfor
the mutual use or exchange of use of any health care resources. Id. (emphasis
added). The 1996 amendments authorized DVA to share all health-care resources
(and, as noted above, Congress included a comprehensive definition of that term in
the statute) and to do so without limiting who may share in those resources, and they
made no mention of purely commercial leases wholly unrelated to the provision ofhealth care. Thus, the legislative history supports the conclusion that the 1996
amendments were intended, as the plain language of the statute makes clear, to
greatly expand DVAs authority to enter into agreements related to the provision of
health care, but not to otherwise expand DVAs authority to enter into commercial
leases wholly unrelated to the provision of health care to veterans.
4. The Challenged Leases Exceed DVAs Authority to ShareHealth-Care Resources
The challenged leases have nothing to do with the sharing of health-care
resources. Rather, they are purely commercial leases involving land or buildings that
happen to be owned by DVA. Accordingly, DVAs decisions to enter into the
challenged leases are outside DVAs statutory authority and must be set aside.
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Brentwood School. DVA entered an agreement with the Brentwood School
under which the school has the right to develop and use a 20-acre parcel of the WLA
Campus as an athletic complex for the school. AR 248-79. The agreement expressly
provides that the area shall be fenced at the perimeter to prevent unauthorized use.
AR 255. The Brentwood School is entitled to use the facility for any school-related
or school-sponsored purpose or function. Id. DVA has no absolute right to enter or
use the area except for the purpose of inspection or protection of the interests of the
DVA, and DVA can request permission to use the facility only at mutually
convenient times to be agreed upon in advance. AR 256. The agreement, thus,
generally excludes veterans from 20-acres of land on the WLA Campus for the benefit
of the Brentwood School, its students, and their families. Neither the agreement nor th
supporting documents articulate any health-care resource on the property, let alone any
benefit to veterans, who, in the absence of the ESA, would have had unfettered access
to the land.
Sodexho Marriot Laundry Services. DVA entered an agreement for use of
Building 224 for processing hospitality linen. AR 341-66. After the original term of
the agreement expired, Sodexho continued its use of the buildings under a series ofextensions, for which the record does not reflect a termination date. AR 374-78.
Sodexho may operate the facility 24 hours a day, 7 days a week and shall lock the
building and provide a master to DVA security. AR 346. The agreement does not
provide for the mutual use or exchange of use of the laundry facilities between Sodexh
and DVA, i.e., there is no requirement that DVA laundry be processed, and neither the
agreement nor the supporting documents articulate how the agreement involves a
health-care resource that would provide any direct benefit to veterans. Indeed, DVAs
only explanation of how the agreement would enhance services to veterans was that
[i]ncome generated . . . will be used to support WLAVAMC medical care for
veterans. AR 334. This agreement is purely a commercial lease with a private
corporation that falls outside DVAs power to share health-care resources.
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UC Regents (Baseball Stadium). DVA entered into an agreement with the UC
Regents pursuant to 38 U.S.C. 8151-53 for the use of Jackie Robinson Stadium by
the UCLA baseball team, which occupies approximately 7.35 acres of the WLA
Campus. The May 2001 agreement was for a ten-year term. AR 415-429. The
agreement provides that the Regents will have priority use of the stadium for their
baseball team, AR 418, and that DVA has the right to use the stadium in the event
that the Stadium is not booked, provided it seeks advance notice of its desire to use the
stadium, AR 419, although DVA must reimburse the Regents for costs of DVA events
at the stadium, AR 419, 425. The agreement, thus, generally excludes veterans from 7.
acres of land on the WLA Campus for the benefit of the UCLA baseball team and does
not relate in any way to the provision of health-care resources to veterans. In a 2008
Memorandum to the Secretary, Under Secretary for Health Michael J. Kussman
recommended against approving the renewal of the Jackie Robinson ESA, repeatedly
stressing that the agreement has no impact or direct benefit to veteran care. AR
409-411. Although Former Secretary James Peake agreed with this assessment,AR
411, DVA continued to renew the ESA on an ongoing basis following the termination
of its initial term in May 2011, AR 430-444.Twentieth Century Fox Television. DVA entered an agreement with Twentieth
Century Fox Television for the use and development of a 73,160 square foot parcel of
land on the WLA Campus for parking, storage and maintenance of production sets.
AR 648-65. The agreement runs through August 2016 and provides for a 10-year
renewal option. AR 648, 650. The agreement permits Fox to construct a 40,000 square
foot building to house production sets and equipment. AR 614, 649, 660-61. This
purely commercial lease does not involve the sharing of health-care resources. Thus,
the only benefit that DVA identified before entering the agreement was revenue and
thepotential for employment opportunities because Fox was interested in employin
several veterans as guards for the site, AR 614. However, there is no corresponding
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provision contemplating employment for veterans in the actual, executed ESA, AR 648
665. This ESA does not relate to the provision of health care resources for veterans.
Veteran Park Conservancy. In 2006, DVA entered into discussions to
convert a pre-existing MOU with the non-profit Veterans Park to an agreement
under the health-care resource sharing authority. AR 826. In the executed agreement,
DVA provides a new entity known as the Veterans Park Conservancy with use of
approximately sixteen (16) acres of land . . . on a year round basis for a period of up to
30 years. AR 861-76, 868. In lieu of consideration, DVA apparently expects a gift o
capital improvements to exceed $5 million, AR 827, but the Record contains no
evidence that such a gift was ever actually made. The agreement itself contains no
provisions tying it to the provision of medical or health care resources. AR861-76. Th
now-encumbered space would otherwise have been available to veterans for the same
purposes without the ESA. Indeed, the ESA serves only to deprive veterans of access t
the space throughout the year by providing the resource to a private party.
Westside Breakers Soccer Club. DVA entered into an agreement with the
Westside Breakers Soccer Club for the use of MacArthur Field and lot #38 on the WLA
Campus as a location for soccer practices and matches. AR 895-915. The version ofthe agreement in the Record reflects a term covering 2010-11, and the Record does not
reflect the extent to which an arrangement with the club continues. The agreement
identifies significant portions of each day during which the club is entitled to use the
field. AR 903. The ESA contains no provisions that benefit veterans, much less
involving the provision of health care to veterans.
Westside Services. DVA entered into an agreement with Westside Services,
LLC for the control and operation of all vehicular parking areas on the WLA
Campus. AR 1047-53. The agreement runs for another nine years. AR 1055. The
ESAs only apparent purpose is revenue generation from the operation of parking
facilities for surrounding businesses, AR 1047, and as-needed parking management for
events unrelated to health-care, AR 1059.
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TMC LLC (Farmers Market). The Record indicates that the ESA with TCM,
LLC is merely a commercial lease of DVAs land so that TCM could hold a farmers
market. AR 1056-84. Indeed, DVAs Memorandum Review document, which formed
the basis for the TCM ESA, does not mention the word health care. AR 1064-65.
Richmark Entertainment. The resource to be shared under DVAs
agreement with Richmark Entertainment is booking services and theatre management
services, AR 1145, 1214, for theatrical productions in theatres on the WLA Campus.
The agreement is purely commercial in nature and provides no health-care benefit to
veterans. In January of 1999, Richmark submitted a proposal to DVA to establish the
Wadsworth [theatre on the WLA Campus] as a theatre to house the road companies o
many Broadway and Off Broadway shows. AR 1087-1090. DVA ultimately formed
an agreement with Richmark to manage the theatre which contained no mention of
veterans or health care, describing the agreement as a sound business decision. AR
1091. DVA renewed its contract with Richmark on January 1, 2006, in a sharing
agreement that again failed to mention veterans or health care. AR 1208-48.
Filming Agreements. The Record contains documents related to eleven separat
Filming Agreements on the WLA Campus pursuant to the health-care resourcesharing authority. AR 1339-70 (7 Pounds Production), 1385-94 (Warner Bros.), 1404-
31 (NBC Universal), 1452-71 (20th Century Fox Television), 1483-1514 (TNT-
Leverage), 1523-50 (Amy Weiss), 1564-94 (NBC Universal), 1608-19 (Balance
Production), 1630-40 (United Feature Film), 1652-62 (Psychic Bunny) & 1674-84
(Hemisphere Entertainment). None of these agreements have any relationship to
provision of health-care for veterans. In fact, among the most popular locations for
filming on the WLA Campus are Buildings 205, 208 and 209, see, e.g., AR 1320, 1447
1531, 1647, which were purportedly set aside by DVA for housing for homeless
veterans, AR 11. The Record indicates that no proposed Filming Agreement was ever
rejected by DVA.
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Barrington Park. In 1983, the VA entered into a rent-free agreement with the
City of Los Angeles under 38 U.S.C. 5022 (now 38 U.S.C. 8122) for 12 acres to be
used for public recreational use. AR 1690, 1697. This land ultimately became known
as Barrington Park. AR 1699. By an undated letter, DVA noted that the agreement had
lapsed in 1994 and proposed that the agreement be renewed as an enhanced sharing
agreement, with two possible approaches: (1) the City of Los Angeles paying
$300,000.00 per year; or (2) the City of Los Angeles presumably would continue
operating the park free of rent, but would have to share revenue generated by the
parking lots or operations of the park, or both. AR 1699-1700. The Record contains no
evidence that the City responded to the letter or that the ESA was formally executed,
although the VA GLA Master Plan indicated that negotiations were suspended. AR
186. Neither the original agreement, nor the undated letter proposing the ESA make
any reference to the development or sharing of health-care resources on the property
now used as Barrington Park or of any benefits to veterans.
B. Even Assuming the ESA Statute is Ambiguous, DVAs Decisions AreNot Due Any Deference
Congresss intent in 8153 is clear, so the agencys interpretation of the statute iirrelevant. SeeWilderness Socy, 353 F.3d at 1060. Nonetheless, even assuming for th
sake of argument that the health-care resource statute is ambiguous, this Court should
not give any weight to DVAs interpretation. As explained in detail in Plaintiffs
Opposition to the Governments Motion for Summary Judgment, the decisions to enter
into the challenged leases were not made pursuant to a delegation of authority carrying
the force of law, so DVAs decisions are not entitled to deference underChevron. See
Pls. Oppn to Defs. Mot. for Summ. J. at 14-15. The informal interpretations
contained in the ESAs themselves and the internal DVA policy bulletins in the Record
are not due any weight underMeadandSkidmore because they contain no reasoned
analysis and are nothing more than conclusory assertions. Seeid. at 15-17. DVAs
interpretation therefore does not warrant any deference, and the only sensible reading o
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the statutethat it authorizes only sharing agreements that are directly related to the
provision of health carecontrols. SeeWilderness Socy, 353 F.3d at 1069
(discounting agency interpretation underSkidmore because it goes beyond the limits
of what is ambiguous and contradicts what in our view is quite clear (quoting
Whitman v. Am. Trucking Assn, 531 U.S. 457, 481, 121 S. Ct. 903, 149 L. Ed. 2d 1
(2001))).
V. CONCLUSIONFor the foregoing reasons, Plaintiffs respectfully submit that the Court should
grant their motion for summary judgment.
Dated: May 10, 2013. ARNOLD & PORTER LLP
By: /s/ John C. UlinJohn C. UlinAttorneys for Plaintiffs
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