Guam Contractors Ass'n v. Sessions

GUAM CONTRACTORS ASSOCIATION, et al., Plaintiffs-Petitioners, v. JEFFERSON B. SESSIONS, III,Attorney General of the United States, et al., Defendants-Respondents.

CIVIL CASE NO. 16-00075

DISTRICT COURT OF GUAM

January 24, 2018

ORDER RE: MOTION TO DISMISS; OBJECTIONS TO REPORT & RECOMMENDATION

Various Guam businesses ("the employers") have initiated this lawsuit challenging the government's recent administration of its non-agricultural temporary worker program, which allows local businesses to bring foreign workers to Guam to fill a variety of temporary labor roles. As they await the final result of this proceeding, the employers have sought to preliminarily enjoin the government from administering the program in a way that may substantially deviate from its previous administration and may be responsible for producing the remarkably low approval rate for temporary worker applications observed on Guam in recent years. The court referred the injunction request to the Magistrate Judge, who recommends that the court deny the motion based on a lack of likelihood the employers can ultimately prevail in the case. The employers timely objected, contending the Magistrate Judge improperly applied the case law regarding the scope of the explanation required for these agency adjudications and improperly interpreted some of the crucial relevant regulations. While the Magistrate Judge had the injunction question under advisement, the government moved to dismiss the case entirely, contending the court lacks subject matter jurisdiction and the employers have failed to state any cognizable legal claim for which the court may grant relief. The parties have submitted briefing on the dismissal issues, and they have timely filed their responses to the Magistrate Judge's report and recommendation regarding injunction. The court heard argument on the injunction and dismissal motions on December 11, 2017.

The Defendants' motion to dismiss (ECF No. 30) is GRANTED in part and DENIED in part. The Plaintiffs' motion for preliminary injunction (ECF No. 8) is GRANTED in part. The Magistrate Judge's Report and Recommendation (ECF No. 61) is ADOPTED in part and MODIFIED in part as noted.

I. FACTUAL AND PROCEDURAL BACKGROUND

The Magistrate Judge ably sets forth the relevant statutory, regulatory, and factual background in the report and recommendation, and the parties have lodged no objection. This order incorporates the background by reference.

II. LEGAL STANDARDS

A. Motion to Dismiss—Lack of Subject Matter Jurisdiction. To invoke the court's subject matter-jurisdiction, a party need only set forth "a short and plain statement of the grounds for the court's jurisdiction." Leite v. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014). The party must, of course, allege facts and not mere legal conclusions, in accord with the pleading standards established in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009). Id. Those cases generally require that a complaint alleges factual matter that, if taken as true, is sufficient to state a claim for "relief plausible on its face." Iqbal, 556 U.S. at678. Assuming compliance with that standard, the factual allegations are to be taken as true unless challenged by an opposing party. Leite, 749 F.3d at 1121. The government makes no factual challenge to the allegations here; instead, its facial attack accepts the employers' factual allegations as true and contends that even if true, they cannot establish jurisdiction. Id. The court's task in resolving the challenge is simply to determine "whether the allegations are sufficient as a legal matter to invoke the court's jurisdiction." Id.

B. Motion to Dismiss—Failure to State a Claim. The task for evaluating a motion to dismiss for failure to state a claim is closely related, as the court must again determine whether the complaint contains factual matter sufficient to state a claim for relief plausible on its face. See Iqbal, 556 U.S. at 678. The court may determine "a claim has facial plausibility when the plaintiff sets forth factual content that allows the court to draw a reasonable inference that the defendant is liable for the misconduct alleged." Id. Plausibility, the Supreme Court has explained, is to be distinguished from probability of success—which is not required—and from "sheer possibility" of unlawful conduct—which will not suffice. Id. Generally, the court takes any factual allegations in the complaint as true and construes the pleadings in the light most favorable to the nonmoving party. Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). But the court need not accept as true allegations contradicted by judicially noticeable facts, and the court may appropriately look beyond the complaint to matters of public record. See, e.g., Shwarz v. United States, 234 F.3d 428, 435 (9th Cir. 2000); Shaw v. Hahn, 56 F.3d 1128, 1129 n.1 (9th Cir. 1995).

C. Preliminary Injunction. Typically, a party seeking a preliminary injunction must establish a likelihood of success on the merits, a likelihood of irreparable harm in the absence of preliminary relief, the balance of the equities weighs in his or her favor, and the injunction is in the public interest. Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 20 (2008). Butpreliminary injunctions may take multiple forms, and certain forms may require a heightened showing from the seeking party. Prohibitory injunctions, which prohibit a party from taking action and preserve the status quo pending a final determination of the legal action, generally require only the showing as articulated in Winter. Marlyn Nutraceuticals, Inc. v. Mucos Pharma GmbH & Co., 571 F.3d 873, 877 (9th Cir. 2009). Mandatory injunctions, by contrast, go "well beyond simply maintain[ing] the status quo" and have often been disfavored; as a result, they have generally required a showing that "extreme or very serious damage will result" in the absence of preliminary relief. Id.

III. DISCUSSION

Subject Matter Jurisdiction. The government's basic argument with respect to jurisdiction appears to be based on an objection to the scope of the relief the employers seek. The broad scope, the government suggests, is indicative of a "wholesale" or "programmatic" challenge to the agency's implementation of some program of visa adjudication not yet precisely identified by anyone—which may constitute a kind of challenge previously frowned upon by the Supreme Court. Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 890 (1990). Because the challenge here is fundamentally "programmatic," the government adds, the employers have failed to identify in their complaint any "discrete, final" agency action that might serve as a jurisdiction-conferring foundation for their claims. Id. That is particularly true, the government emphasizes, for the various petitions still pending in front of the agency and any petitions not yet submitted—over those petitions, it maintains, the court has no jurisdiction.

This collection of positions presents several problems. First, whether "finality" or any other reviewability provisions in the Administrative Procedure Act ("APA") constitute "jurisdictional" requirements appear to be unsettled questions in the case law. Nothing in the text of the APA suggests any of its reviewability requirements are jurisdictional, and the caseshave observed as much. See, e.g., Air Courier Conference v. Am. Postal Workers Union, 498 U.S. 517, 523 n.3 (1991) ("The judicial review provisions of the APA are not jurisdictional."); see also Iowa League of Cities v. E.P.A., 711 F.3d 844, 863 n.12 (8th Cir. 2013); Trudeau v. FTC, 456 F.3d 178, 183-84 (D.C. Cir. 2006). Nevertheless, the Ninth Circuit has at times adopted the position that "finality is a jurisdictional requirement to obtaining judicial review under the APA." Fairbanks N. Star Borough v. U.S. Army Corps of Engineers, 543 F.3d 586, 591 (9th Cir. 2008); Ukiah Valley Med. Ctr. v. FTC, 911 F.2d 261, 264 n.1 (9th Cir. 1990) ("[F]inality is . . . a jurisdictional requirement."). But as the Supreme Court has relatively recently explained, "jurisdiction is a word of many, too many, meanings," and courts generally err in treating statutory restrictions on suit as jurisdictional where Congress has declined to explicitly identify the restrictions as jurisdictional. Arbaugh v. Y&H Corp., 546 U.S. 500, 516 (2006). The courts acknowledging and examining those principles from Arbaugh have thus generally concluded that APA claims carry no jurisdictional requirement of finality or ultimate reviewability; instead, APA claims simply invoke the court's jurisdiction by way of posing a federal question, as envisioned by 28 U.S.C. § 1331. See, e.g., Vietnam Veterans of America v. Shinseki, 599 F.3d 654, 661 (D.C. Cir. 2010) (noting court had repeatedly held prior to 2005 that the "APA's reviewability provisions were jurisdictional," but that the contrary view is "firmly established" in light of developing Supreme Court case law on the meaning of "jurisdictional"); accord Pakootas v. Teck Cominco Metals, Ltd., 646 F.3d 1214, 1220 (9th Cir. 2011) (highlighting Supreme Court's recent focus on "whether the word 'jurisdiction'" is "used in a sentence controlling the claim at issue").

Here, the employers present various claims arising under the APA and regardless whether they have adequately stated those claims, by raising them they have adequately invoked the court's federal question jurisdiction—as various courts have recognized. See, e.g., Haines v.Fed. Motor Carrier Safety Admin., 814 F.3d 417, 424 (6th Cir. 2016) ("[T]he district court had subject matter jurisdiction over [claimant's] APA claim under the federal question statute."); Trudeau v. Fed. Trade Comm'n, 456 F.3d 178, 185 (D.C. Cir. 2006); see also Proyecto San Pablo v. I.N.S., 189 F.3d 1130, 1136 n.5 (9th Cir. 1999) ("In the absence of a specific statutory provision to the contrary, district...