Dhs Reply

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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND SOUTHERN DIVISION CHAMBER OF COMMERCE OF THE UNITED STATES OF AMERICA, et al.,

) ) ) Plaintiffs ) ) v. ) ) JANET NAPOLITANO, et al., ) ) Defendants. ) ____________________________________)

8:08-CV-03444-AW

DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ EMERGENCY MOTION FOR AN INJUNCTION PENDING APPEAL Nearly a week after losing on all counts on the merits, and with just three court days before the applicability date of the rule at issue, plaintiffs approach this Court to seek an injunction against the rule that the Court has found to be a lawful use of the President’s Procurement Act power. Plaintiffs’ motion, like the underlying claims in this case, is without merit. Plaintiffs rely principally on cases concerning applications for a stay of a district court order. Here, however, plaintiffs are not simply seeking a stay of this Court’s order; they are seeking the “‘extraordinary and drastic remedy’” of an injunction. Munaf v. Geren, 128 S. Ct. 2207, 2219 (2008) (quoting 11A Wright & Miller § 2948 (2d ed. 1995)). As the Supreme Court has recently reiterated, “[a] preliminary injunction is an extraordinary remedy never awarded as of right.” Winter v. Natural Resources Defense Council, Inc., 129 S. Ct. 365, 376 (2008). A plaintiff seeking such extraordinary relief “must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the 1

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balance of equities tips in his favor, and that an injunction is in the public interest.” Id. at 374; accord W.V. Ass’n of Club Owners v. Musgrave, 553 F.3d 292, 298 (4th Cir. 2009). The failure to establish any one of these four factors necessitates denial of injunctive relief. See Winter, 129 S. Ct. 365 (denying injunction because plaintiff had failed to establish likelihood of irreparable harm); CitiFinancial, Inc. v. Lightner, 2007 WL 3088087, at *2 (N.D.W.V. 2007) (“[T]he Fourth Circuit set forth these factors as four independent criteria, each of which must be met, rather than as a four-part balancing test.”). Plaintiffs bear the burden of proof on each factor. Direx Israel, Ltd. v. Breakthrough Med. Corp., 952 F.2d 802, 812 (4th Cir. 1991). I.

Plaintiffs Do Not Have a Likelihood of Success on the Merits As this Court has held, “[a] party seeking a stay pending appeal must make a strong

showing of likely success on the merits of the appeal.” St. Agnes Hospital v. Riddick, 751 F. Supp. 75, 76 (D. Md. 1990) (quotation omitted). Moreover, while some cases, including Riddick, suggest that a difficult question on the merits may be sufficient for injunctive relief, the Supreme Court’s recent opinion in Munaf v. Geren makes it clear that such relief requires that it be more likely than not that the plaintiff will succeed on the merits. 128 S. Ct. at 2219; see also Lorillard Tobacco Co. v. S & M Brands, Inc., 616 F. Supp. 2d 581, 586 (E.D. Va. 2009) (applying Munaf); Signature Flight Support Corp. v. Landow Aviation Ltd. Partnership, 2009 WL 111603, at *2 (E.D. Va. Jan. 14, 2009) (same). Even before Munaf, in Long v. Robinson, the principal authority relied on by plaintiffs, Judge Winter found that plaintiffs had not established a likelihood of success on the merits where “[a]ll of the legal authorities which the parties claim [to be] pertinent were considered by the district judge and appear to have been correctly applied.” 432 F.2d 977, 980 (4th Cir. 1970) (Winter, J., in chambers). Similarly, in this case, it

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is apparent that the Court considered all of the legal authorities presented by the parties, and that the District Court correctly applied them. The Court methodically examined each of plaintiffs’ seven counts and found each to be without merit, in most cases for two independent reasons. See Docket 51, at 9-24. In Count I, plaintiffs contended that the Secretary of Homeland Security violated IIRIRA by issuing a Designation Notice. The Court correctly rejected this claim on two independent grounds: (1) the Secretary is not “requiring any person or entity to do anything” as Secretary Chertoff merely engaged in “a ministerial act”; and (2) entry into government contracts “is a voluntary choice.” Id. at 9. In Count II, plaintiffs contended that the Court should rewrite IIRIRA to change the term “Secretary of Homeland Security” to “entire Executive Branch.” The Court correctly rejected this invitation, holding: (1) “The text of [IIRIRA] is clear [and had] Congress intended anything else, Congress easily could have drafted this section to apply to the President or other agencies”; and (2) “the decision to be a government contractor is voluntary.” Id. at 10-14. In Count III, plaintiffs asked this Court to substitute its judgment for the President’s judgment as to what will promote efficiency and economy in government procurement. The Court again declined plaintiffs’ invitation to exceed the judicial role, noting that “[t]he President and his Administration are in a better position than this Court to make such determinations.” Id. at 17. In this, the Court joined the unanimous position of courts which have considered Procurement Act challenges and declined to substitute judicial opinion for the conclusions of the President. Counts IV and V were quickly dispatched by the Court and understandably so given their lack of substance. See id. at 18-19. Count IV is meritless because there is nothing in IIRIRA’s

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text that “prohibits the Executive Branch from using E-Verify for current employees.” Id. at 18. Count V fails because plaintiffs “have conceded that they are not asserting that the Procurement Act violates the non-delegation doctrine,” and this is the only Constitutional challenge that could be brought to the President’s statutorily authorized action. Id. at 19. Finally, the Court found plaintiff’s technical claims to be without merit both because the FAR Council complied with both the Federal Procurement Policy Act and the Regulatory Flexibility Act, and because, even if plaintiffs’ could establish a violation, the remedy would not involve striking down the rule. Id. at 19-24. Moreover, plaintiffs’ assertion that this case presents issues of “first impression” is true, if at all, only because of the forum which the plaintiffs chose. The issues in this case have been decided in other circuits in the same way that this Court decided them here. Indeed, in dismissing Counts I-III, this Court followed the persuasive reasoning of the D.C. Circuit in AFL CIO v. Kahn, 618 F.2d 784 (D.C. Cir. 1979).1 Similarly, the Ninth Circuit interpreted IIRIRA § 402(a) in the same manner as this Court in Chicanos Por La Causa, Inc. v. Napolitano, 558 F.3d 856, 867 (9th Cir. 2009). Plaintiffs have simply taken meritless claims that would be foreclosed by precedent in other circuits, and filed them in a circuit that has not yet addressed them. This is not sufficient to permit the extraordinary and drastic remedy of injunctive relief.

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In dismissing Count III, the Court relied on numerous cases in addition to Kahn: AFGE v. Reagan, 870 F.2d 723, 727-28 (D.C. Cir. 1989); City of Albuquerque v. United States Dep’t of the Interior, 379 F.3d 901, 914 (10th Cir. 2004); UAW-Labor Employment & Trading Corp. v. Chao, 325 F.3d 360, 366-67 (D.C. Cir. 2003); Farkas v. Texas Instrument, Inc., 375 F.2d 629, 632 n.1 (5th Cir. 1967). 4

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II.

Plaintiffs Have Not Established that They Are Likely To Suffer Irreparable Harm Plaintiffs seeking injunctive relief must “demonstrate that irreparable injury is likely in

the absence of an injunction.” Winter, 129 S. Ct. at 375 (emphasis in original); accord Nat’l R.R. Passenger Corp. v. Railway Express, LLC, 2009 WL 2169053, at *2 (D. Md. July 17, 2009) (“Irreparable harm must be likely, not merely possible.”). Plaintiffs allege that some of their members will suffer irreparable harm in the absence of an injunction because users of E-Verify will incur some costs. See Pl’s Mem. at 7-8. But, even assuming that monetary damages can constitute irreparable harm – which is not normally the case – the very declaration relied on by plaintiffs demonstrates that members will not internalize these costs but will simply bill them back to the Federal Government. See DiFranco Decl. ¶ 30 (“Of course, these additional costs will be incorporated into Quality Support’s pricing structure, thereby increasing the overall cost to the Federal Government when it contracts with Quality Support.”). Finally, any of plaintiffs’ members who wish to avoid the inconvenience of electronically verifying the work status of its employees can simply abstain from entering into contracts requiring E-Verify. Plaintiffs also seek to assert the interest of their members’ employees whom, they contend, “will face an increased risk of employment discrimination.” Pl’s Mem. at 8. But plaintiffs do not have standing to assert the interests of employees, particularly because if there is any employment discrimination it would be done by the employers, i.e. plaintiffs’ members. Employment discrimination is not a direct result of the rule, it is a direct result of the misuse of E-Verify by employers, conduct that violates employment laws that are vigorously enforced by the Department of Justice.

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In short, plaintiffs have failed their burden of establishing irreparable harm and thus their motion must be denied. III.

The Balance of Equities Favors Defendants and an Injunction Would Be Against the Public Interest While plaintiffs have not established a likelihood of irreparable harm, the government

would be irreparably harmed by the granting of an injunction pending appeal and an injunction would harm the public interest. “In exercising their sound discretion, courts of equity should pay particular regard for the public consequences in employing the extraordinary remedy of injunction.” Winter, 129 S. Ct. at 376-77 (quotation omitted). Plaintiffs’ interests are purely the private pecuniary interests of their members, and even these are questionable. In contrast, where the interests of defendants – which include the United States itself – are harmed, the public interest is similarly harmed. As the Court found, the rule in this case aims to ensure the reliability of government contractors in order to improve economy and efficiency in government contracting. The FAR Council voluntarily delayed the applicability of the rule for two reasons: (1) to allow the current administration sufficient time to review the Executive Order and rule, and (2) to allow this litigation to proceed such that the issue could be fully briefed and decided on the merits by this Court before the applicability date. Now, the current administration having concluded that the Executive Order and rule are correct policy, and this Court having determined that the Executive Order and rule are lawful, there is no justification for delaying a measure that will help protect the government’s procurement process from avoidable disruption. This is particularly true given that an appeal could take months or even years. Plaintiffs completely ignore this important interest of both defendants and the public. 6

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Moreover, contrary to plaintiffs’ contention, the ongoing legislative activity in Congress does not militate in favor of a stay. The Senate has passed language that, in plaintiffs’ words, “would not only extend the life of E-Verify, but would require government contractors to participate in E-Verify.” Pl’s Mem. at 11. The House, by contrast has passed language that would extend E-Verify but “does not include language requiring contractors to participate in EVerify.” Id. Thus, the two proposals are to mandate the same or similar result as the rule in this case, thus potentially making the rule redundant, or to simply leave the rule in effect. Either way, use of E-Verify will be a term of federal contracting, the only debate is whether it will be inserted by statute or by rule. In either case, the injunction sought by plaintiffs would defeat Congressional and Executive intent and therefore disserve the public interest in lawful government by the elected branches. CONCLUSION For the foregoing reasons, plaintiffs’ motion for an injunction should be denied. September 3, 2009

Respectfully submitted, TONY WEST Assistant Attorney General SANDRA M. SCHRAIBMAN Assistant Branch Director /s/ Jeffrey M. Smith JEFFREY M. SMITH U.S. Department of Justice 20 Massachusetts Ave., N.W., Room 7144 Washington, D.C. 20001 Tel: (202) 514-5751 Fax: (202) 616-8470 Counsel for Defendants

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