1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 L1 TECHNOLOGIES, INC., Case No. 19-cv-2338-MMA (LL)
12 Plaintiff, ORDER GRANTING DEFENDANT’S 13 v. MOTION FOR SUMMARY JUDGMENT/TO AFFIRM AGENCY 14 U.S. CUSTOMS AND BORDER DECISION PROTECTION, 15 Defendant. [Doc. No. 3] 16 17 18 19 On December 6, 2019, L1 Technologies, Inc. (“Plaintiff”) filed a Complaint 20 “requesting an order to command” U.S. Customs and Border Protection (“Defendant” or 21 “CBP”) “to produce documents responsive to a subpoena and a demand for information” 22 to be used in a pending state court civil action. See Doc. No. 1 at 2 (“Compl.”). On 23 February 13, 2020, Defendant filed a “Motion for Summary Judgment/to Affirm Agency 24 Decision.” See Doc. No. 3. Plaintiff filed an opposition to Defendant’s motion, and 25 Defendant replied. See Doc. Nos. 5, 7. The Court found the matter suitable for 26 determination on the papers and without oral argument pursuant to Federal Rule of Civil 27 Procedure 78(b) and Civil Local Rule 7.1.d.1. Doc. No. 8. For the reasons set forth 28 below, the Court GRANTS Defendant’s motion. 1 I. BACKGROUND 2 Plaintiff’s request to compel Defendant to produce responsive documents to a 3 subpoena and demand for information arises from a state court action between Plaintiff 4 and Baruc Mayer (“Mayer”). Compl. ¶ 4. 5 In California Superior Court, Mayer brought suit against Plaintiff, alleging 6 discrimination, retaliation, and failure to compensate for completed work. Id. ¶ 5; see 7 also Falkoff Decl., Ex. 1, Doc. No. 3-1 at 6–32 (state court complaint).1 As a defense in 8 the state action, Plaintiff argues that Mayer resides in Mexico and was present in Mexico 9 during the times Mayer alleges he worked for Plaintiff in the United States. Compl. ¶ 7. 10 Plaintiff claims that Defendant’s records contain evidence helpful to its defense in the 11 state court action: 12 13 [Plaintiff] therefore has strong reason to believe that [Defendant] has records that will show Mayer’s entry and exit between the United States and 14 Mexico, and that such records will be strong evidence in the State Court 15 Litigation both as evidence pertaining to whether Mayer was actually working in the United States for [Plaintiff] on dates he has claimed, and as 16 impeachment evidence. [Plaintiff] is informed and believes that the 17 requested information may and likely will have a significant impact on the outcome of the State Court Litigation, making the need for [Plaintiff] to 18 obtain this information substantial and significant. 19 20 Id. ¶ 9. 21 On May 20, 2019, Plaintiff served a “Deposition Subpoena for Production of 22 Business Records” on Defendant. Falkoff Decl., Ex. 2, Doc. No. 3-1 at 34–39; see also 23 Compl. ¶ 10. Plaintiff describes the records sought as follows: 24 25 1. All Writings (defined by Evidence Code section 250) relating to the entry into the United States from Mexico by Baruc Mayer, whose date of birth is 26 27 28 1 2/20/1978 and California Driver’s License Number D7565002 from 1/1/2016 through present date. 2
3 2. All writings (defined by Evidence Code section 250) relating to the exit from the United States from [sic] Mexico by Baruc Mayer, whose date of 4 birth is 2/20/1978 and California Driver’s License Number D7565002 from 5 1/1/2016 through present date.
6 3. Baruc Mayer also goes by the name “Baruc Nathan Mayer Morales” and 7 have [sic] a Mexican Secretary of Defense Matricula Number: C-2390474.
8 9 Doc. No. 3-1 at 38; see also Compl. ¶ 13. On June 3, 2019, Plaintiff served a second 10 subpoena on Defendant requesting the same type of materials but with greater 11 specification relating to Mayer’s entry into the United States through the San Ysidro and 12 Otay Mesa Border Crossings. See Falkoff Decl., Ex. 3, Doc. No. 3-1 at 43; Compl. ¶ 10. 13 On June 6, 2019, Defendant responded to the first subpoena with a letter 14 “declin[ing] to produce [the] requested records at this time.” Falkoff Decl., Ex. 4, Doc. 15 No. 3-1 at 48. In declining Plaintiff’s request, Defendant based its decision on factors 16 under its regulations “applicable to disclosure of information by CBP.”2 See id. at 48–49. 17 On June 19, 2019, Defendant responded to both the first and second subpoenas with a 18 letter declining to comply with both subpoenas. See Falkoff Decl., Ex. 5, Doc. No. 3-1 at 19 51–52. Defendant noted that state courts lack jurisdiction to enforce subpoenas against it 20 and Plaintiff did not adhere with the necessary Touhy regulations. See id. at 51–52. 21 Defendant declined to produce the requested documents and requested Plaintiff withdraw 22 the subpoenas. See id.; Compl. ¶ 11. 23 In an email thread confirming a phone conversation that Plaintiff would withdraw 24 the subpoena, Defendant stated that it would further consider Plaintiff’s information 25 request if it were submitted with a Privacy Act waiver, with the supporting information 26
27 2 As explained infra, these regulations are colloquially referred to as “Touhy regulations” based on the 28 1 required under the agency’s regulations, and “with a significantly narrowed geographical 2 and temporal scope.” Falkoff Decl., Ex. 7, Doc. No. 3-1 at 56. On June 24, 2019, 3 Plaintiff subsequently withdrew its June subpoena. See Falkoff Decl., Ex. 6, Doc. No. 3- 4 1 at 54. 5 On October 25, 2019, Plaintiff served a third subpoena on Defendant. See Falkoff 6 Decl., Ex. 8, Doc. No. 3-1 at 64; Compl. ¶ 12. Plaintiff describes the records sought as 7 follows: 8 9 1. All Writings (defined by Evidence Code section 250) relating to the entry into the United States from Mexico by Baruc Mayer, whose date of birth is 10 2/20/1978 and California Driver’s License Number D7565002 from 11 1/1/2016 through present date.
12 2. All writings (defined by Evidence Code section 250) relating to the exit 13 from the United States to Mexico by Baruc Mayer, whose date of birth is 2/20/1978 and California Driver’s License Number D7565002 from 14 1/1/2016 through present date. 15 3. Bruce Mayer also goes by the name “Baruc Nathan Mayer Morales” and 16 has a Mexican Secretary of Defense Matricula Number: C-2390474. 17 18 Doc. No. 3-1 at 64; Compl. ¶ 12. Plaintiff attached the state court complaint and an 19 affidavit from its attorney to the third subpoena. See Doc. No. 3-1 at 60–101. The 20 subpoena required Defendant to produce the records by November 14, 2019. See id. at 21 62. 22 On December 6, 2019, Plaintiff filed this action. Plaintiff’s action seeks judicial 23 review under the Administrative Procedures Act (“APA”) regarding Defendant’s refusal 24 to produce documents responsive to the October 25 subpoena and demand for 25 information. See Compl. ¶ 3, 22, 25. Plaintiff requests that “[Defendant] be ordered to 26 comply with the subpoena and demand for information as attached in Exhibit 2 and that 27 28 1 the CBP produce its records relating to Mayer’s exit and entry between the United States 2 of America and Mexico from January 1, 2016 through to the present.” Id. ¶ 25.3 3 In a declaration filed in support of its motion, agency counsel provides context for 4 why Defendant did not respond to Plaintiff’s third subpoena: 5 6 L1 Technologies served its October 25, 2019 subpoena on the Office of General Counsel of the Department of Homeland Security in Washington 7 DC rather than CBP. On December 3, 2019, DHS OGC forwarded this 8 subpoena to CBP’s Office of Chief Counsel in Washington DC, and it was then sent to CBP counsel’s office in San Diego on that same date. Thus, 9 CBP did not receive this third subpoena from L1 Technologies until 3 days 10 prior to LI Technologies’ filing the present lawsuit, which it did on December 6, 2019. 11
12 13 Falkoff Decl. ¶ 9, Doc. No. 3-1 at 2–3; see also Doc. No. 7 at 3 n.2. 14 II. RELEVANT LAW 15 A. Legal Standard 16 As a preliminary matter, the parties disagree on the applicable legal standard. 17 Defendant moves to affirm its underlying agency decision pursuant to the standard 18 governing Touhy regulations. See Doc. No. 3 at 7–11. In other words, Defendant 19 requests the Court find that the underlying agency decision was neither arbitrary nor 20 capricious under section 706(2)(A) of the APA. See 5 U.S.C. § 706(2)(A). However, 21 Plaintiff applies the traditional standard for summary judgment and argues that Defendant 22 has not met its burden to show no genuine dispute as to any material fact. See Doc. No. 5 23 at 3–4, 6. In reply, Defendant charges that Plaintiff applies the incorrect legal standard 24 and places the burden of proof on the wrong party. Doc. No. 7 at 2. 25 26
27 3 Plaintiff describes “Exhibit 2” as the third subpoena issued on October 25. See Compl. ¶ 12. 28 1 Despite Defendant’s motion being brought as a “Motion for Summary Judgment/to 2 Affirm Agency Decision,” the Court does not apply the Federal Rule of Civil Procedure 3 56 standard to review an administrative agency’s final decision under the APA. See 4 Occidental Eng’g Co. v. I.N.S., 753 F.2d 766, 769 (9th Cir. 1985); see also Tolowa 5 Nation v. United States, 380 F. Supp. 3d 959, 962 (N.D. Cal. 2019); Benhoff v. United 6 States Deptt of Justice, No. 16-cv-1095-GPC (JLB), 2017 WL 840879, at *4 (S.D. Cal. 7 Mar. 3, 2017) (“[T]he standard on summary judgment in a standard civil case is different 8 than reviewing an agency decision in an APA case.”); SLPR, LLC v. U.S. Army Corps of 9 Engineers, No. 6-cv-1327-MMA (POR), 2011 WL 940509, at *3 n.2 (S.D. Cal. Mar. 17, 10 2011). The Ninth Circuit has clearly differentiated summary judgment in a standard civil 11 case from summary judgment as a means for a district court to review a final agency 12 decision: 13 14 [The District Court] is not required to resolve any facts in a review of an administrative proceeding. Certainly, there may be issues of fact before the 15 administrative agency. However, the function of the district court is to 16 determine whether or not as a matter of law the evidence in the administrative record permitted the agency to make the decision it did. De 17 novo factfinding by the district court is allowed only in limited 18 circumstances that have not arisen in the present case. The appellant confuses the use of summary judgment in an original district court 19 proceeding with the use of summary judgment where, as here, the district 20 court is reviewing a decision of an administrative agency which is itself the finder of fact. In the former case, summary judgment is appropriate only 21 when the court finds there are no factual issues requiring resolution by trial. 22 In the latter case, summary judgment is an appropriate mechanism for deciding the legal question of whether the agency could reasonably have 23 found the facts as it did. 24 25 Occidental Eng’g Co., 753 F.2d at 769–70 (citations omitted). When reviewing an 26 agency’s decision, the district court sits as an appellate body “to determine whether or not 27 as a matter of law the evidence in the administrative record permitted the agency to make 28 the decision it did.” Id. at 769. Accordingly, the district court is “limited to review of the 1 administrative record.” Animal Def. Council v. Hodel, 840 F.2d 1432, 1436 (9th Cir. 2 1988) (citing Friends of the Earth v. Hintz, 800 F.2d 822, 828 (9th Cir. 1986)). The 3 district court does not focus on “some new record made initially in the reviewing court.” 4 Fla. Power & Light Co. v. Lorion, 470 U.S. 729, 743 (1985) (quoting Camp v. Pitts, 411 5 U.S. 138, 142 (1973)). “The task of the reviewing court is to apply the appropriate APA 6 standard of review, 5 U.S.C. § 706, to the agency decision based on the record the agency 7 presents to the reviewing court.” Animal Def. Council, 840 F.2d at 1436 (quoting Fla. 8 Power & Light Co., 470 U.S. at 743–44). 9 Here, Plaintiff seeks judicial review under the APA of Defendant’s refusal to 10 produce documents responsive to a subpoena and demand for information. See generally 11 Compl. Despite its clunky title, Defendant’s motion requires the Court to review the 12 agency’s decision not to produce documents. Therefore, the Court applies the required 13 legal standard under the APA and not the traditional Rule 56 standard. 14 B. Standard of Review 15 Pursuant to the APA, a court may set aside a final agency action that is “arbitrary, 16 capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. 17 § 706(2)(A). “The arbitrary and capricious standard is ‘highly deferential, presuming the 18 agency action to be valid and [requires] affirming the agency action if a reasonable basis 19 exists for its decision.’” Kern Cty. Farm Bureau v. Allen, 450 F.3d 1072, 1076 (9th Cir. 20 2006) (quoting Indep. Acceptance Co. v. California, 204 F.3d 1247, 1251 (9th Cir. 21 2000)); see also Mt. St. Helens Mining & Recovery Ltd. P’ship v. United States, 384 F.3d 22 721, 728 (9th Cir. 2004) (“Applying the arbitrary and capricious standard, this court must 23 determine whether the agency articulated a rational connection between the facts and the 24 choice made.”). Courts give additional deference to a final agency decision “when that 25 agency is not a party to the dispute.” Akal Sec., Inc. v. U.S. Immigration & Customs 26 Enf’t, No. 9-cv-2277-W (NLS), 2010 WL 2731649, at *4 (S.D. Cal. July 9, 2010) 27 (quoting COMSAT Corp. v. Nat’l Sci. Found., 190 F.3d 269, 278 (4th Cir. 1999)). The 28 reviewing court’s application of the standard is “narrow,” and a court cannot supplant the 1 agency’s judgment. Mt. St. Helens Mining & Recovery Ltd. P’ship, 384 F.3d at 728 2 (citing Marsh v. Oregon Nat. Res. Council, 490 U.S. 360, 378 (1989)). To fulfill its 3 obligations, the Court must conduct a “thorough, probing, in-depth review” of the 4 administrative record. Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 5 415, (1971), abrogated on other grounds by Califano v. Sanders, 430 U.S. 99 (1977). A 6 reviewing court can overturn a final agency decision only if the agency demonstrated a 7 “clear error of judgment.” Id. (quoting California Trout v. Schaefer, 58 F.3d 469, 473 8 (9th Cir. 1995)). 9 10 Normally, an agency rule would be arbitrary and capricious if the agency has relied on factors which Congress has not intended it to consider, entirely 11 failed to consider an important aspect of the problem, offered an explanation 12 for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the 13 product of agency expertise. 14 15 Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 16 (1983). 17 A court’s review under the APA is “limited to review of the administrative 18 record.” Animal Def. Council, 840 F.2d 1436 (citing Friends of the Earth, 800 F.2d at 19 828). However, the record can be expanded “(1) if necessary to determine ‘whether the 20 agency has considered all relevant factors and has explained its decision,’ (2) ‘when the 21 agency has relied on documents not in the record,’ or (3) ‘when supplementing the record 22 is necessary to explain technical terms or complex subject matter.’” Sw. Ctr. for 23 Biological Diversity v. U.S. Forest Serv., 100 F.3d 1443, 1450 (9th Cir. 1996) (quoting 24 Inland Empire Pub. Lands Council v. Glickman, 88 F.3d 697, 703–04 (9th Cir. 1996)). 25 C. Touhy Regulations 26 An agency head may “may prescribe regulations for the government of his 27 department, the conduct of its employees, the distribution and performance of its 28 business, and the custody, use, and preservation of its records, papers, and property 1 5 U.S.C. § 301. These regulations are referred to as Touhy regulations and have “the full 2 force of law.” Swett v. Schenk, 792 F.2d 1447, 1451 (9th Cir. 1986) (quoting Ex parte 3 Sackett, 74 F.2d 922, 923 (9th Cir. 1935)); see generally U.S. ex rel. Touhy v. Ragen, 340 4 U.S. 462 (1951) (citing Boske v. Comingore, 177 U.S. 459 (1900)). 5 The Department of Homeland Security (“DHS”) and CBP both have enacted 6 Touhy regulations for when a party in a state civil suit seeks information from the 7 agencies. See 6 C.F.R. § 5.41–5.49 (DHS’s Touhy regulations); 19 C.F.R. § 103.21– 8 103.27 (CBP’s Touhy regulations). Both DHS and CBP bar employees from complying 9 with a demand for agency information without approval from the respective agency’s 10 chief counsel. See 6 C.F.R. § 5.44; 19 C.F.R. § 103.22. Each agency provides the 11 necessary procedures and requirements for subpoenas and demands for information. See 12 6 C.F.R. § 5.43–5.45; 19 C.F.R. § 103.22. 13 Determining whether to disclose information, each agency examines several 14 general factors. See 6 C.F.R. § 5.48(a); 19 C.F.R. § 103.23(a). For example, the CPB 15 considers the following factors: 16 17 (1) Whether the disclosure would be appropriate under the relevant substantive law concerning privilege; 18
19 (2) Whether the disclosure would be appropriate under the rules of procedure governing the case or matter in which the demand arose; and, 20
21 (3) Whether the requesting party has demonstrated that the information requested is: 22
23 (i) Relevant and material to the action pending, based on copies of the summons and complaint that are required to be attached to the 24 subpoena duces tecum or other demand; 25 (ii) Genuinely necessary to the proceeding, i.e., a showing of 26 substantial need has been made; 27 (iii) Unavailable from other sources; and, 28 1 (iv) Reasonable in its scope, i.e., the documents, information, or 2 testimony sought are described with particularity. 3 (4) Whether consultation with the originating component requires that the 4 Chief Counsel make a separate determination as to the disclosure of the 5 information requested.
6 7 19 C.F.R. § 103.23(a). Each agency also examines circumstances where disclosure will 8 not be authorized. See 6 C.F.R. § 5.48(b); 19 C.F.R. § 103.23(b). The circumstances 9 where disclosure will not be made include the following under the CBP regulations: 10 11 (1) Disclosure would violate a treaty, statute (such as the Privacy Act, 5 U.S.C. 552a, the Trade Secrets Act, 18 U.S.C. 1905, or the income tax laws, 12 26 U.S.C. 6103 and 7213), or a rule of procedure, such as the grand jury 13 secrecy rule, Fed.R.Crim.Proc. rule 6(e) (18 U.S.C.App.);
14 (2) Disclosure would violate a specific regulation; 15 (3) Disclosure would reveal classified or confidential information; 16
17 (4) Disclosure would reveal a confidential source or informant;
18 (5) Disclosure would reveal investigatory records compiled for law 19 enforcement purposes, interfere with enforcement proceedings, or disclose investigative techniques and procedures; 20
21 (6) Disclosure would improperly reveal confidential commercial information without the owner's consent (e.g., entry information); 22
23 (7) Disclosure relates to documents which were produced by another agency or entity; 24
25 (8) Disclosure would unduly interfere with the orderly conduct of CBP business; 26
27 (9) CBP has no interest, records, or other official information regarding the matter in which disclosure is sought; 28 1 (10) There is a failure to make proper service upon the United States; or 2
3 (11) There is a failure to comply with federal, state, or local rules of discovery. 4
5 6 19 C.F.R. § 103.23(b). 7 A party can challenge a final agency decision based on Touhy regulations through 8 bringing a civil action in district court pursuant to the APA. See Kwan Fai Mak v. F.B.I., 9 252 F.3d 1089, 1093 (9th Cir. 2001) (holding that actions taken pursuant to the 10 Department of Justice’s Touhy regulations were not “arbitrary, capricious, an abuse of 11 discretion,” or “in excess of statutory . . . authority” under 5 U.S.C. § 706(2).); see also 5 12 U.S.C. § 702 (“A person . . . adversely affected or aggrieved by agency action within the 13 meaning of a relevant statute, is entitled to judicial review thereof.”); Akal Sec., Inc., 14 2010 WL 2731649, at *4 (“DHS’s decision to prohibit its current and former employees 15 from testifying pursuant to a state-court subpoena is exactly the kind of final agency 16 action subject to review under the APA’s arbitrary and capricious standard.”). 17 III. DISCUSSION 18 A. Plaintiff’s Objections 19 As a preliminary matter, the Court addresses Plaintiff’s “procedural and 20 evidentiary objections” to Defendant’s motion. Doc. No. 5-1 at 2–3. 21 1. Objection 1: Defendant Has Not Provided a Separate Statement of 22 Undisputed Facts 23 Plaintiff objects generally because Defendant did not file a separate statement of 24 undisputed material facts pursuant to the Court’s Civil Chambers rules. See Doc. No. 5-1 25 at 2 (referring to J. Anello Civ. Chambers R. IV). Defendant argues that it is not 26 necessary because the “motion is not a garden variety summary judgment motion but is 27 instead a motion to affirm an agency decision under the APA.” See Doc. No. 7 at 5 28 (footnote omitted). 1 As already discussed, the Court does not apply Federal Rule of Civil Procedure 56 2 when reviewing an administrative agency’s final decision. See supra Section II.A. 3 Although summary judgment may serve as a possible vehicle for a party seeking to 4 affirm or dispute an agency’s decision, see, e.g., Occidental Eng’g Co., 753 F.2d at 770; 5 Tolowa Nation, 380 F. Supp. 3d at 962, the APA’s legal standard controls. In reviewing 6 an APA action, a district court functions as an appellate court “to determine whether or 7 not as a matter of law the evidence in the administrative record permitted the agency to 8 make the decision it did.” Occidental Eng’g Co., 753 F.2d at 769. A separate statement 9 of undisputed material facts is unnecessary when the Court functions as an appellate 10 entity reviewing an administrative record. Accordingly, the Court OVERRULES 11 Plaintiff’s objection. 12 2. Objection 2: Defendant Has Not Filed an Answer or Supplied the Entire 13 Administrative Record 14 Plaintiff objects to Defendant’s motion as procedurally inappropriate because 15 Defendant did not file an answer or the entire administrative record. See Doc. No. 5-1 at 16 2. Defendant argues that it was not required to file an answer, and that it filed its motion 17 before the deadline to respond to Plaintiff’s complaint. Doc. No. 7 at 7. Defendant notes 18 that the motion to affirm the agency decision could have been brought either as a motion 19 for summary judgment or a motion to dismiss. Id. Regarding the administrative record, 20 Defendant states that it “submitted the administrative record for this Court’s review” and 21 “the administrative record upon which the agency acted in this case, and which the 22 agency is asking this Court to review, is what CBP submitted—the underlying state court 23 complaint, L1 Technologies’ subpoenas, the responses by CBP attorneys, and the Falkoff 24 declaration.” Doc. No. 7 at 8. 25 As to the first dispute, Defendant filed its motion within the time required under 26 Rule 12 to respond to Plaintiff’s Complaint. See Doc. Nos. 3, 4. Defendant’s response to 27 Plaintiff’s Complaint challenging an agency decision could have been brought as a 28 motion for summary judgment or a motion to dismiss. See, e.g., Occidental Eng’g Co., 1 753 F.2d at 770 (reviewing a district court’s grant of summary judgment); Tolowa 2 Nation, 380 F. Supp. 3d at 962 (ruling on parties’ cross motions for summary judgment); 3 Debry v. Dep’t of Homeland Sec., 688 F. Supp. 2d 1103, 1111 (S.D. Cal. 2009) (ruling on 4 an agency’s motion to dismiss or, in the alternative, motion for summary judgment). 5 Either motion would have required the Court to conduct the same analysis under the 6 APA. The Court finds that the form of motion is inconsequential. 7 As to the dispute over the administrative record, Defendant clearly states in its 8 reply brief that it has produced the entire administrative record. See Doc. No. 7 at 8 9 (“Here, the administrative record upon which the agency acted in this case, and which the 10 agency is asking this Court to review, is what CBP submitted . . . .”). The Court takes 11 Defendant’s representation as true. Moreover, discovery beyond the administrative 12 record is inappropriate when a reviewing court decides whether an agency action was 13 arbitrary or capricious. Again, the reviewing court functions as an appellate entity and is 14 limited to the administrative record. See Occidental Eng’g Co., 753 F.2d at 769. 15 Traditional discovery is unnecessary and inappropriate because “there are no disputed 16 facts that the district court must resolve.” Id. 17 Accordingly, the Court OVERRULES Plaintiff’s objection. 18 3. Objections 3 and 4: Defendant’s Declaration in Support of its Motion 19 Should Be Stricken or Not Considered 20 Plaintiff’s final objections pertain to the Declaration of Stacy Falkoff in Support of 21 Defendant’s Motion—both as to the entire declaration and, specifically, paragraph nine. 22 See Doc. No. 5-1 at 3 (referring to Doc. No. 3-1). Plaintiff argues that “in reviewing 23 agency action the Court is limited to reviewing the entire administrative record and post- 24 hoc rationalization in [a] declaration do[es] not constitute proper evidence in support of 25 an agency decision.” Doc. No. 5-1 at 3 (citing Citizens to Preserve Overton Park, Inc., 26 401 U.S. at 419). Defendant responds that “the Court can and should consider the 27 paragraph . . . explaining why CBP would continue to decline to produce the requested 28 records.” Doc. No. 7 at 8. It explains that “the reasons provided in the paragraph in the 1 Falkoff Declaration declining to produce the requested records were reasons provided in 2 CBP’s prior letters.” Id. at 9. It further notes that the declaration—to the extent the 3 declarant relied upon the Complaint—provides context as to why further information was 4 needed with the earlier subpoenas: “It was only with its third subpoena that [Plaintiff] 5 actually supplied the state court complaint, and attempted to provide some reasoning for 6 why the requested records were genuinely necessary in the context of the underlying 7 proceeding.” Id. 8 As noted above, a court’s review under the APA is “limited to review of the 9 administrative record.” Animal Def. Council, 840 F.2d 1436 (citing Friends of the Earth, 10 800 F.2d at 828). However, the Ninth Circuit has explained that a court may expand the 11 record under certain circumstances: “(1) if necessary to determine ‘whether the agency 12 has considered all relevant factors and has explained its decision,’ (2) ‘when the agency 13 has relied on documents not in the record,’ or (3) ‘when supplementing the record is 14 necessary to explain technical terms or complex subject matter.’” Sw. Ctr. for Biological 15 Diversity, 100 F.3d at 1450 (quoting Inland Empire Pub. Lands Council, 88 F.3d at 703– 16 04). “Post-hoc rationalizations” are generally an inadequate basis for review and fall 17 outside the “‘whole record’ complied by the agency” under 5 U.S.C. § 706’s scope. 18 Citizens to Pres. Overton Park, Inc., 401 U.S. at 419. 19 Although Plaintiff brought suit before Defendant responded to the third subpoena, 20 the Court remains constrained to its review of the administrative record. Defendant’s 21 declaration is primarily a means to attach exhibits constituting the administrative record. 22 See Doc. No. 3-1 at 2. In the ninth paragraph, the declarant provides information 23 regarding issues between DHS and CBP in delivering the third subpoena to the correct 24 CBP official. See id. at 2–3. The ninth paragraph also provides the following 25 information: 26 27 Had CBP formally responded to this subpoena, CBP would have declined to produce the requested records, for essentially the same reasons as CBP had 28 1 previously given in its prior two letters. In particular, CBP would have cited the Touhy regulations that counsel the agency to conserve its and the U.S.’s 2 resources for its federal mission, and to avoid partiality between private 3 parties and the diversion of federal resources to purposes that are both private and not part of CBP’s mission. This is particularly the case where 4 complying with such requests would have much larger impacts if considered 5 not just singly, but in the aggregate. In addition, CBP had requested that L1 Technologies obtain a Privacy Act waiver from the person whose personal 6 records were at issue, Baruc Mayer; and that Ll Technologies reduce the 7 temporal and geographic scope of its request. Ll Technologies did neither of those things. Finally, having looked more closely at the state court 8 complaint underlying this subpoena, it is apparent that witnesses other than 9 the state court plaintiff are identified as being present during the events specifically alleged in that complaint, and even witnesses apart from L1 10 Technologies’/the state court defendant’s CEO. Thus, there would seem to 11 be other avenues—such as witness testimony—to get at the information put at issue by the state court complaint itself. This too would have counselled 12 against CBP providing the information requested by L1 Technologies in its 13 third subpoena.
14 15 Id. at 3 (emphasis added). 16 The Court finds that this part of the declaration pertaining to how Defendant 17 “would have” responded to Plaintiff’s third subpoena is a post-hoc rationalization that 18 falls outside of the administrative record. Therefore, it “may not be advanced as a new 19 rationalization either for sustaining or attacking an agency’s decision.” Sw. Ctr. for 20 Biological Diversity, 100 F.3d at 1450–51 (holding that a district court did not abuse its 21 discretion in striking a letter that “constitute[d] post-decision information). The three 22 exceptions articulated by the Ninth Circuit do not save Defendant. First, the proffered 23 information as to how Defendant “would have” replied to the third subpoena is not 24 necessary to determine whether Defendant considered the relevant factors because 25 Defendant, in fact, was unable to determine the relevant factors in the first place as to the 26 third subpoena. Second, it does not appear that Defendant has relied on documents not in 27 the record. Third, there are no technical terms or complex subject matter that would 28 allow for supplemental information. 1 Accordingly, the Court SUSTAINS in part and OVERRULES in part Plaintiff’s 2 objection to the Falkoff Declaration. In ruling on the instant motion, the Court will only 3 examine the administrative record. Accordingly, the Court SUSTAINS Plaintiff’s 4 objection regarding paragraph nine of the declaration only as to the sentences after 5 Defendant’s explanation of the receipt of the subpoena from DHS. Plaintiff’s objection is 6 otherwise overruled. 7 B. Whether There Is a “Final Agency Action” 8 Although neither party addresses this point, the Court must assess as a threshold 9 matter: whether there is a final agency action subject to review under the APA. 10 11 “Agency action made reviewable by statute and final agency action for which there is no other adequate remedy in a court are subject to judicial 12 review. A preliminary, procedural, or intermediate agency action or ruling 13 not directly reviewable is subject to review on the review of the final agency action.” 14
15 16 5 U.S.C. § 704; see also Mt. St. Helens Mining & Recovery Ltd. P’ship, 384 F.3d at 727 17 (“It is well established that once an agency has taken final agency action under the APA, 18 a reviewing court analyzes that decision under the ‘arbitrary and capricious’ standard of 19 review.”). The APA defines “agency action” as both action and refusal to act: “the whole 20 or a part of an agency rule, order, license, sanction, relief, or the equivalent or denial 21 thereof, or failure to act.” 5 U.S.C. § 551(13). Determining an agency action as final 22 requires satisfaction of two conditions: (1) “the action must mark the consummation of 23 the agency’s decisionmaking process—it must not be of a merely tentative or 24 interlocutory nature” and (2) “the action must be one by which rights or obligations have 25 been determined, or from which legal consequences will flow.” U.S. Army Corps of 26 Engineers v. Hawkes Co., 136 S. Ct. 1807, 1813 (2016) (quoting Bennett v. Spear, 520 27 U.S. 154, 177–78). In examining finality, courts “focus on the practical and legal effects 28 of the agency action: ‘The “finality element must be interpreted in a pragmatic and 1 flexible manner.”’” Oregon Nat. Desert Ass’n v. U.S. Forest Serv., 465 F.3d 977, 982 2 (9th Cir. 2006) (quoting Oregon Nat. Res. Council v. Harrell, 52 F.3d 1499, 1503 (9th 3 Cir. 1995)); see also Al Otro Lado, Inc. v. Nielsen, 327 F. Supp. 3d 1284, 1318 (S.D. Cal. 4 2018). 5 In its motion, Defendant states “[its] decision in this case to decline production of 6 the requested information pursuant to a state-court subpoena is exactly the kind of final 7 agency action subject to review under the APA’s arbitrary and capricious standard.” 8 Doc. No. 3 at 8. Although Plaintiff withdrew its second subpoena, see Doc. No. 3-1 at 9 54, it has not withdrawn the first or third subpoenas. Defendant’s June 6 and June 19 10 letters, which declined to produce the records, do not pertain to the third subpoena. See 11 id. at 48–49, 51–52. 12 The Court finds that there was a final agency action as to the first subpoena 13 through Defendant’s June 6 and 19 letters. The letters both clearly note Defendant 14 declined to produce the sought records, see Doc. No. 3-1 at 48–49, 51–52, thus indicating 15 the end of the agency’s decision-making process and determination of Defendant’s legal 16 obligations. See U.S. Army Corps of Engineers, 136 S. Ct. at 1813 (quoting Bennett, 520 17 U.S. at 177–78); see also Akal Sec., Inc., 2010 WL 2731649, at *4 (“DHS’s decision to 18 prohibit its current and former employees from testifying pursuant to a state-court 19 subpoena is exactly the kind of final agency action subject to review under the APA’s 20 arbitrary and capricious standard”). 21 It is less clear that there is a final action as to the third subpoena. Administrative 22 issues between DHS and Defendant did not allow Defendant to respond to the subpoena 23 in a timely manner and Plaintiff filed suit before Defendant could respond. See Doc. No. 24 3-1 at 2–3; see also Doc. No. 7 at 3 n.2. However, the first and third subpoenas ask for 25 essentially the same information, compare Doc. No. 3-1 at 38, with id. at 64, and 26 Defendant repeated in its June 6 and June 19 letters that it declines to produce the sought 27 information from the first subpoena, see id. at 48–49, 51–52. Defendant’s motion is clear 28 that it still does not intend to produce information responsive to any of Plaintiff’s issued 1 subpoenas. See Doc. No. 3 at 2, 13, 14, 15–16. This indicates that Defendant considers 2 its decision as to the third subpoena as final. Moreover, Plaintiff appears to consider 3 Defendant’s failure to respond to the third subpoenas as final given it filed the present 4 action. See, e.g., Compl. ¶16 (“Despite L1’s demand for documents fully complying with 5 the applicable regulations, CBP has again refused and failed to produce any responsive 6 information.”). 7 Despite any uncertainty over the timing of the third subpoena’s receipt and 8 whether Plaintiff brought this action prematurely, the Court ultimately examines “the 9 practical and legal effects of the agency action.” Oregon Nat. Desert Ass’n, 465 F.3d at 10 982. Because Defendant treats its refusal to comply with the third subpoena as final—as 11 demonstrated by its responses to the to the prior subpoenas and its present motion—and 12 its decision determined its legal obligations, see U.S. Army Corps of Engineers v. Hawkes 13 Co., 136 S. Ct. at 1813 (quoting Bennett, 520 U.S. at 177–78), the Court finds that 14 Defendant has rendered a final agency action under the APA. 15 C. Whether Defendant’s Decision Was “Arbitrary and Capricious” Under the APA 16 Defendant argues that it considered the relevant Touhy factors and subsequently 17 made a rational connection between the factors and its decision to decline to supply 18 information to Plaintiff. See Doc. No. 3 at 12. In response, Plaintiff asserts that the 19 documents provided in support of Defendant’s motion do not “indicate who considered 20 the requests, what information they considered, or whether they meaningfully considered 21 the requests. Instead, the letters from the CBP denying the requests are loaded with 22 boilerplate.” Doc. No. 5 at 5. 23 As noted above, both DHS and CBP have established Touhy regulations that 24 govern how the agencies respond to subpoenas arising from state court litigation. See 6 25 C.F.R. § 5.41–5.49; 19 C.F.R. § 103.21–103.27. The Court proceeds by determining 26 whether Defendant articulated a rational connection between the facts, its established 27 Touhy regulations, and its ultimate decision. See Mt. St. Helens Mining & Recovery Ltd. 28 P’ship, 384 F.3d at 728. 1 In its response, Defendant stated that it would not be able to seek a protective order 2 or shield sensitive information, see Doc. No. 3-1 at 49, which it connected to factors not 3 authorizing disclosure when there is sensitive information, see 19 C.F.R. § 103.23(b)(3)– 4 (6). Defendant noted that disclosure would be burdensome when examining similar 5 requests in aggregate in the context “of all third-party demands served upon CBP,” Doc. 6 No. 3-1 at 49, which it connected to factors not authorizing disclosure where the request 7 would interfere with CBP’s work, see, e.g., 19 C.F.R. § 103.23(b)(3)(8)–(9). Defendant 8 questioned whether the sought information is “genuinely necessary” to the state action, 9 see Doc. No. 3-1 at 49, which connects to a factor asking whether the requesting party 10 demonstrated necessity and unavailability from other sources, see 19 C.F.R. § 11 103.23(a)(3)(ii)–(iii) (“i.e., a showing of substantial need”). Addressing the burdensome 12 scope of the request “seek[ing] all inbound and outbound border crossing records for an 13 individual for a 3.5 year period,” Doc. No. 3-1 at 52, Defendant’s reasoning connects to 14 another factor where a request’s scope is not reasonable, see 19 C.F.R. § 103.23(a)(3)(iv). 15 Defendant also stated that the records are protected by the Privacy Act, Doc. No. 3-1 at 16 52 (referencing 5 U.S.C. § 552a), which connects to a factor not authorizing disclosure 17 where disclosure would violate a statute, see C.F.R. § 103.23(b)(1) (explicitly listing 5 18 U.S.C. § 552a as an example). Finally, Defendant noted that it generally declines 19 involvement in third party civil litigation because of its limited resources, see Doc. No. 3- 20 1 at 52, and points to several DHS and CBP regulations not authorizing disclosure, see, 21 e.g., 19 C.F.R. § 103.23(b)(3)(8)–(9); see also Benhoff, 2017 WL 840879, at *5 (“Courts 22 should defer to the agency on how to best use its resources as they are in the best position 23 to determine how much time and effort would be involved considering its ability to 24 comply.”). 25 The Court finds that Defendant made reasonable connections in applying the 26 Touhy regulations to the facts available when declining to furnish the information. 27 Because the Court finds that there is a reasonable connection between the facts and final 28 agency decision, the Court defers to the agency and presumes that the agency action is 1 ||valid. See Kern Cty. Farm Bureau, 450 F.3d at 1076; Mt. St. Helens Mining & Recovery 2 ||Ltd. P’ship, 384 F.3d at 728. Moreover, the Court also keeps in mind the additional 3 ||deference provided to Defendant’s final actions where it is not a party in the underlying 4 court litigation. See Akal Sec., Inc., 2010 WL 2731649, at *4 (quoting COMSAT 5 ||Corp., 190 F.3d at 278). Plaintiff does not overcome the presumption of validity. The 6 ||Court cannot, and thus does not, supplant Defendant’s judgment. See Mt. St. Helens 7 ||Mining & Recovery Ltd. P’ship, 384 F.3d at 728 (citing Marsh, 490 U.S. at 378). In 8 ||reviewing the agency’s judgment, the Court does not find that Defendant committed a 9 |\clear error of judgment. 10 Accordingly, the Court finds that Defendant’s refusal to comply with Plaintiffs 11 ||subpoenas and demands for information was neither arbitrary nor capricious. See 5 12 ||U.S.C. § 706(2)(A). 13 IV. CONCLUSION 14 For the foregoing reasons, the Court GRANTS Defendant’s motion and 15 ||AFFIRMS Defendant’s final agency action declining to comply with the subpoenas and 16 ||demands for information issued by Plaintiff. The Court INSTRUCTS the Clerk of Court 17 ||to enter judgment accordingly and to close the case. 18 IT IS SO ORDERED. 19 20 ||Dated: April 8, 2020 21 Jth, Lu _ lad 22 HON. MICHAEL M. ANELLO United States District Judge 23 24 25 26 27 28