Gonzales & Gonzales Bonds & Ins. Agency, Inc. v. U.S. Dep't of Homeland Sec.

107 F.4th 1064

GONZALES & GONZALES BONDS & INSURANCE AGENCY, INC.;Topper Brokerage, Inc.; Lexington National Insurance Corporation;American Surety Company; Allegheny Casualty Company, Plaintiffs-Appellees, v. U.S. DEPARTMENT OF HOMELAND SECURITY; Chad F. Wolf,Under the title of Acting Secretary of Homeland Security;United States Citizenship and Immigration Services; Kenneth T. Cuccinelli,Under the title of Senior Official Performing the Duties ofthe Deputy Secretary of Homeland Security, Defendants-Appellants.

No. 22-16552

United States Court of Appeals, Ninth Circuit

Argued and Submitted October 19, 2023 San Francisco, California

Filed July 18, 2024

Appeal from the United States District Court for the Northern District of California Kandis A. Westmore, Magistrate Judge, Presiding, D.C. No. 4:20-cv-08897-KAW.

Joseph C. Gjonola, (argued), Gary A. Nye, and David R. Ginsburg, Roxborough Pomerance Nye & Adreani LLP, Woodland Hills, California; for Plaintiffs-Appellees.

Anna O. Mohan (argued) and Melissa N. Patterson, Appellate Staff Attorneys; Stephanie Hinds, United States Attorney; Brian M. Boynton, Principal Deputy Assistant Attorney General; Civil Division, United States Department of Justice, Washington, D.C.; James C. Luh, Assistant United States Attorney, United States Department of Justice, Washington, D.C.; for Defendants-Appellants.

Brian R. Frazelle (argued), Brianne J. Gorod, and Elizabeth B. Wydra, Constitutional Accountability Center, Washington, D.C., for Amicus Curiae Constitutional Accountability Center.

Before: Carlos T. Bea, Morgan Christen, and Anthony D. Johnstone, Circuit Judges.

Concurrence by Judge Johnstone;

Dissent by Judge Christen

OPINION

BEA, Circuit Judge:

In certain immigration cases, the Department of Homeland Security ("DHS") requires a bond—similar to a bail bond in criminal cases—to avoid detention of the alien pending deportation. The bond secures a promise that the alien will appear for immigration proceedings, which will determine whether the alien can remain in the United States. Commercial firms, known as sureties, provide such bonds. In 2020, the "Acting Secretary" of the DHS promulgated a rule that permitted the agency to refuse business from certain surety firms that were serially delinquent in making payments for absconding aliens or that had garnered a reputation for posting bonds for frequent absconders. See Procedures and Standards for Declining Surety Immigration Bonds and Administrative Appeal Requirement for Breaches, 85 Fed. Reg. 45968, 45968-69 (July 31, 2020) (the "Rule").

But some of those sureties that were not too fond of this new Rule, which cut into their business, realized that the "Acting Secretary" who promulgated the Rule may not have been duly appointed. Hence, the Rule might be invalid and the sureties might have been improperly banned from doing business with the DHS.

Unfortunately for the sureties' pretensions, in 2021 Secretary of Homeland Security Alejandro Mayorkas, who was duly appointed, ratified the Rule. But that leaves the question—does the exercise of ratification cure the alleged defect in the Rule's promulgation? We hold that it does. Under principles of agency law and Circuit precedent, Secretary Mayorkas had the authority to ratify an action taken by an improperly appointed Acting Secretary, who would not otherwise have been authorized to take that action. See Consumer Fin. Prot. Bureau v. Gordon, 819 F.3d 1179, 1190-92 (9th Cir. 2016). But there was a possible hurdle to the exercise of ratification. Under the so-called "Ratification Bar," Secretary Mayorkas could not ratify promulgation of the Rule if such promulgation could be performed only by the Secretary of Homeland Security himself. See 5 U.S.C. § 3348(a)(2), (d)(2).

We conclude that the Secretary had the authority to delegate promulgation of the Rule; it was not a function or duty singularly entrusted to the Secretary. See 6 U.S.C. § 112(b)(1). Because the Secretary could have delegated promulgation of the Rule, Secretary Mayorkas could ratify the 2020 promulgation of the Rule, regardless whether the Rule's promulgation had been actually delegated. Thus, ratification of the Rule by Secretary Mayorkas cured any defect in the Rule's promulgation.

The question in this case is whether 5 U.S.C. § 3348(d)(2), the Ratification Bar, which prohibits ratification of certain actions taken by a purported officer serving in violation of the Federal Vacancies Reform Act of 1998 ("FVRA"), applies only to "functions or duties" that are singularly entrusted by statute or regulation to that officer, and in other words are "nondelegable." We hold that it does. By the statute's own definition,¹ § 3348(d)'s Ratification Bar applies only to nondelegable functions or duties because only nondelegable functions or duties are "required by statute [or regulation] to be performed by the applicable officer (and only that officer)." 5 U.S.C. § 3348(a)(2). Thus, we hold that the district court erred in granting Plaintiffs' motion for summary judgment because the FVRA did not bar Secretary Mayorkas from ratifying the Rule, and that ratification cured any defects in the Rule's 2020 promulgation.

I. BACKGROUND

Article II of the Constitution gives the President the authority to appoint "Officers of the United States," but requires the President to obtain the "Advice and Consent of the Senate" to make those appointments effective. U.S. CONST. art. II, § 2, cl. 2. To avoid negative repercussions of vacancies in those positions, "Congress has long accounted for th[e] reality" of vacancies "by authorizing the President to direct certain officials to temporarily carry out the duties of a vacant . . . office in an acting capacity, without Senate confirmation." NLRB v. SW Gen., Inc., 580 U.S. 288, 293, 137 S.Ct. 929, 197 L.Ed.2d 263 (2017). The current version of that authorization is the FVRA, 5 U.S.C. §§ 3345-49e.

Under the FVRA, when an Executive agency officer "whose appointment to office is required to be made by the President, by and with the advice and consent of the Senate, dies, resigns, or is otherwise unable to perform the functions and duties of the office[,] the first assistant to the office of such officer shall perform the functions and duties of the office temporarily in an acting capacity," 5 U.S.C. § 3345(a)(1), unless the President selects either another officer who was previously Presidentially appointed and Senate-confirmed or an officer or employee of the same agency who has served a specified time in that agency, id. § 3345(a)(2)-(3).

The FVRA is the "exclusive means for temporarily authorizing an acting official to perform the functions and duties of any office of an Executive agency . . . for which appointment is required to be made by the President, by and with the advice and consent of the Senate, unless a statutory provision expressly authorizes the President, a court, or the head of an Executive department" to designate the acting officer, a statute designates the acting officer, or the President makes an appointment during a Senate recess. Id. § 3347(a).

In December 2016, President Obama exercised his authority under § 3345(a) to establish an order of succession for the Office of Secretary of Homeland Security in case of an office vacancy. Exec. Order No. 13753, 81 Fed. Reg. 90667 (Dec. 9, 2016) ("Executive Order 13753"). Later that month, Congress amended the Homeland Security Act to give the Secretary of Homeland Security independent authority to create an order of succession, but did not change the order of succession established by President Obama's Executive Order 13753. National Defense Authorization Act for Fiscal Year 2017, Pub. L. No. 114-328, § 1903, 130 Stat. 2000, 2672 (2016) (codified at 6 U.S.C. § 113(g)). President Obama signed the Act, and it became law.

A. Chad Wolf's Ascension to "Acting Secretary" of the DHS

In April 2019, Kirsjten Nielsen, on her last day of service as Secretary of Homeland Security, modified an order titled "DHS Orders of Succession and Delegations of Authority for Named Positions," also known as Delegation 00106. Delegation 00106, both before and as amended, provided in subparts II.A-B:

A. In case of the Secretary's death, resignation, or inability to perform the functions of the Office, the orderly succession of officials is governed by Executive Order 13753, amended on December 9, 2016.

B. I hereby delegate to the officials occupying the identified positions in the order listed (Annex A), my authority to exercise the powers and perform the functions and duties of my office, to the extent not otherwise prohibited by law, in the event I am unavailable to act during a disaster or catastrophic emergency.

(emphasis added). In a document titled "Amending the Order of Succession in the Department of Homeland Security," Secretary Nielsen invoked her authority under 6 U.S.C. § 113(g)(2), and "designate[d] the order of succession for the Secretary of Homeland Security as follow[ed]." What followed were instructions to strike Annex A and replace it with a new list, still titled "Annex A. Order for Delegation of Authority by the Secretary of the Department of Homeland Security." Notably, Secretary Nielsen did not change the text of Delegation 00106, subpart II.A; so, Annex A, both before and after Secretary Nielsen's order, applied only to delegations occurring "during a disaster or catastrophic emergency." As a result, absent a delegation during a disaster or catastrophic emergency, subpart II.A, "the orderly succession of officials" to the Secretary's office, was still "governed by Executive Order 13753."

As of Secretary Nielsen's last day in office, the list of names in Secretary Nielsen's Annex A and Executive Order 13753 differed. Annex A listed (1) the Deputy Secretary of Homeland Security, (2) the Under Secretary for Management, (3) the Commissioner of Customs and Border Protection ("CBP"), and (4) the Administrator of the Federal Emergency Management Agency ("FE...