Arizona, State of v. Yellen
This text of Arizona, State of v. Yellen (Arizona, State of v. Yellen) is published on Counsel Stack Legal Research, covering District Court, D. Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA
9 State of Arizona, No. CV-21-00514-PHX-DJH
10 Plaintiff, ORDER
11 v.
12 Janet Yellen, et al.,
13 Defendants. 14 15 Pending before the Court is Defendants’ Motion to Transfer (Doc. 68). Plaintiff has 16 filed a Response (Doc. 69), and Defendant filed a Reply (Doc. 70). For the following 17 reasons, the Court denies the Motion. 18 I. Background 19 In this action, Plaintiff, the State of Arizona (“Arizona”), challenged a provision 20 within American Rescue Plan Act of 2021 (“ARPA”), which restricted how States could 21 use federal funds intended to combat the Covid-19 pandemic (the “Arizona Matter”). 22 Specifically, Arizona challenged 42 U.S.C. § 802(c)(2)(A), which states that recipients 23 shall not use ARPA funds to “directly or indirectly offset a reduction in net tax revenue . . 24 . .” (the “Offset Restriction”). If such an offset were found, Defendant United States 25 Department of the Treasury could recoup the amount of funds that had violated the 26 Restriction. 42 U.S.C. § 802(e). Arizona challenged § 802(c)(2)(A) on the grounds that 27 the Offset Restriction was so ambiguous that it violated the spending clause. (Doc. 1). 28 Arizona also argued that the Offset Restriction infringed on its state sovereign immunity. 1 (Id.) 2 For reasons explained in the Court’s prior Order, Arizona lacked standing to pursue 3 the case because it had not demonstrated a concrete injury. (Doc. 61). In part of its 4 analysis, the Court had found there was no realistic danger that Defendants were seeking 5 to recoup any of the ARPA funds under 42 U.S.C. § 802(e). (Doc. 61 at 7–8). The Court, 6 therefore, dismissed this action for lack of subject matter jurisdiction. Plaintiff has since 7 filed an appeal with the Ninth Circuit. (Doc. 63). 8 Now, Defendants, the United States Department of the Treasury (the “Treasury”) 9 and Treasury officials, seek to transfer the matter of Ducey v. Yellen, CV-22-00112-PHX- 10 SPL (the “Ducey Matter”), to this Court under Local Rule 42.1. That matter, brought by 11 Arizona governor Douglas Ducey (“Governor Ducey”), deals with the potential 12 recoupment of ARPA funds for the alleged violation of 42 U.S.C. § 802(c)(1). As opposed 13 to the Offset Restriction, § 802(c)(1) describes what types of expenditures are permissible, 14 such as supporting essential workers, small businesses, and infrastructure, among other 15 uses (the “Permitted Uses”). 16 The dispute in the Ducey Matter concerns whether Arizona’s use of ARPA funds in 17 its “Plus-Up” program is permissible under the Permitted Uses. As alleged by Governor 18 Ducey, Defendants, had argued that the Plus-Up program’s use of ARPA funds was 19 impermissible, because it uses the funds to provide tuition relief for families so long as 20 schools do not enact a policy require face coverings. In the Duce Matter, Governor Ducey 21 argues that this use of funds remains consistent with Permitted Uses, and he brings claims 22 under the Administrative Procedure Act (“APA”) challenging Defendants’ contrary 23 statutory interpretation. He also seeks judicial declarations that 42 U.S.C. § 802, as a 24 whole, is unconstitutionally ambiguous and that Defendants have exceeded their power 25 under the non-delegation doctrine. 26 II. Discussion 27 The Local Rules provide that when two cases are pending before different judges, 28 parties may transfer a case to a single judge provided that the cases: “(1) arise from 1 substantially the same transaction or event; (2) involve substantially the same parties or 2 property; (3) involve the same patent, trademark, or copyright; (4) call for determination 3 of substantially the same questions of law; or (5) for any other reason would entail 4 substantial duplication of labor if heard by different Judges.” LRCiv 42.1(a). 5 Governor Ducey first argues that Local Rule 42.1(a) cannot serve to consolidate the 6 two matters because the original matter in this Court is no longer pending. (Doc. 69 at 2). 7 District courts have a “large measure of discretion” when interpreting and applying their 8 local rules. Lance, Inc. v. Dewco Servs., Inc., 422 F.2d 778, 784 (9th Cir. 1970). When 9 determining what “pending” means courts across the country have widely determined that 10 this term includes cases pending on appeal. Carrera v. First Am. Home Buyers Prot. Co., 11 2012 WL 13012698, at *3 (C.D. Cal. Jan. 24, 2012) (collecting cases); Eikenberry v. 12 Callahan, 653 F.2d 632, 635 (D.C. Cir. 1981) (“The ordinary meaning of ‘pending’ 13 includes cases pending on appeal.”). Therefore, the Court finds that the Arizona Matter 14 remains pending for purposes of Local Rule 42.1(a). 15 a. Similarity of Transaction or Event 16 There is no doubt that there are some similarities in both matters. Each involves the 17 restrictions placed on the use of ARPA funds, and each seeks to declare the restrictions as 18 unconstitutionally ambiguous. Governor Ducey argues that the Ducey Matter is different 19 because it involves a challenge to administrative action that occurred after the events giving 20 rise to the Arizona Matter. (Doc. 69 at 6). The Court finds this point persuasive. Although 21 both matters dealt with the same underlying statute, the context out of the matters are 22 factually distinct. The Yellen Matter dealt with a challenge to the Offset Restriction’s bare 23 language, whereas the Ducey Matter deals with Defendant’s interpretation of the Permitted 24 Uses and whether the Plus-Up program is a permitted use. Therefore, while these matters 25 are related, the Court finds that they cannot be said to be substantially similar. 26 b. Similarity of the Parties 27 Next, the Court finds that the parties in both matters are substantially similar. 28 Governor Ducey argues that the parties are not substantially similar because he was not a 1 party to the Arizona Matter. (Doc. 69 at 6). This is true, but the Defendants in both matters 2 are the same and although Governor Ducey was not named in the Arizona Matter, he was 3 certainly involved as the “official authorized to accept and expend funds received from the 4 federal government or any agency thereof.” (Doc. 1 at ¶ 11) (citing A.R.S. § 41-101.01). 5 Therefore, because the only difference in the parties is that one Plaintiff is the state of 6 Arizona and the other is Arizona’s governor, the parties are substantially similar. 7 c. Questions of Law 8 As to the questions of law, the Court finds the two matters present substantially 9 different questions. The Arizona Matter challenged the Offset Restriction on its face, and 10 the Ducey Matter challenges Defendants’ interpretation of the Permitted Uses. The Court 11 recognizes that the Arizona Matter was dismissed because the State of Arizona failed to 12 demonstrate a concrete injury and that, now, the Ducey Matter faces a similar challenge 13 from Defendants in a pending Motion to Dismiss. But this appears to be the only 14 significant question that overlaps. The merits of each case, otherwise, depend on distinct 15 legal issues. 16 d.
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