Statewide Bonding, Inc v. U.S. Department of Homeland Security ( 2019 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
STATEWIDE BONDING, INC., et al.,
Plaintiffs,
v. Civil Action No. 19-2083 (JEB)
U.S. DEPARTMENT OF HOMELAND
SECURITY, et al.,
Defendants.
MEMORANDUM OPINION
A key concept in any first-year Contracts course is the default rule that acceptance of a
contract is effective as of the date it is placed in the mail. See 2 Willison on Contracts § 6:32
(4th ed. 2019). Plaintiffs in this case are bail-bond companies who believe that the
Government’s ignorance of this so-called “mailbox rule” has caused many of their appeals to be
incorrectly rejected as late. More specifically, they read certain agency regulations to apply that
rule to their filing of administrative appeals, arguing that these appeals should be deemed
submitted when mailed. The Department of Homeland Security, contending that a different
regulation applies — one that considers the appeal submitted when received — now moves to
dismiss Plaintiffs’ Complaint. Agreeing that the mailbox rule does not govern here, the Court
will grant the Motion.
I. Background
The factual background of this case is explained in more detail in prior Opinions, as
Statewide has filed several related suits in this Court within the space of a year. See, e.g.,
Statewide Bonding, Inc. v. DHS, No. 18-2115, 2019 WL 2477407 (D.D.C. June 13, 2019)
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(Statewide II). In brief, Plaintiffs Statewide Bonding, Inc. and Big Marco Insurance and
Bonding Services, LLC are bail-bond companies that, in exchange for collateral, post bonds for
non-citizens (among others) who would otherwise be detained pending further proceedings.
Statewide Bonding, Inc. v. DHS, No. 18-2115, 2019 WL 5579970, at *1 (D.D.C. Oct. 29, 2019)
(Statewide III). When a non-citizen does not have sufficient assets for collateral, Plaintiff Nexus
Services, Inc. enters into contracts both with her to provide the collateral and with the bail-bond
company to guarantee her appearance. Id. If the non-citizen fails to appear and the obligor (the
bail-bond company) then cannot produce her, Immigration and Customs Enforcement will find
the obligor in breach of the bond and may fine it up to the full value of the bond. Id. at *1–2. If
the obligor is notified of this breach finding by mail, it has 33 days from the date the breach
notice was mailed to appeal that finding. See 8 C.F.R §§ 1.2, 103.8(b).
The parties agree that the breach notice is deemed served — and thus the 33-day period
begins to run — when ICE mails the notice. Id. § 103.8(b); see ECF No. 10 (Motion to Dismiss)
at 5; ECF No. 12 (Plaintiffs’ Opp.) at 7–8. They disagree, however, as to whether the same
“mailbox rule” applies to the obligor’s mailing of its appeal to the Administrative Appeals Office
of the U.S. Citizenship and Immigration Service or whether it is the receipt of the appeal that
governs.
Plaintiffs, who have had many appeals denied as untimely under DHS’s reading, filed the
present case in July of this year. See ECF No. 1 (Complaint), ¶¶ 33–34. They allege that by
applying the wrong regulation to appeals, DHS is rejecting timely filings in violation of the
Administrative Procedure Act and 42 U.S.C. § 1983. In other words, Plaintiffs allege that they
mailed the appeals within the 33-day period. Id. Defendants, for their part, have now filed a
Motion to Dismiss, affirming their choice of regulation on the APA claim and noting that the
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§ 1983 claim is infirm for multiple reasons, including that it was not brought against state actors.
See MTD at 6, 8.
II. Legal Standard
Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of an action where a
complaint fails “to state a claim upon which relief can be granted.” Although “detailed factual
allegations” are not necessary to withstand a Rule 12(b)(6) motion, “a complaint must contain
sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its
face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550
U.S. 544, 555 (2007); then quoting id. at 570). For a plaintiff to survive a 12(b)(6) motion, the
facts alleged in the complaint “must be enough to raise a right to relief above the speculative
level.” Twombly, 550 U.S. at 555–56.
In evaluating Defendants’ Motion to Dismiss, the Court must “treat the complaint’s
factual allegations as true and must grant plaintiff ‘the benefit of all inferences that can be
derived from the facts alleged.’” Sparrow v. United Air Lines, Inc., 216 F.3d 1111, 1113 (D.C.
Cir. 2000) (citation omitted) (quoting Schuler v. United States, 617 F.2d 605, 608 (D.C. Cir.
1979) (citing Leatherman v. Tarrant Cty. Narcotics Intelligence & Coordination Unit, 507 U.S.
163, 164 (1993)). The Court need not accept as true, however, “a legal conclusion couched as a
factual allegation,” Trudeau v. FTC, 456 F.3d 178, 193 (D.C. Cir. 2006) (quoting Papasan v.
Allain, 478 U.S. 265, 286 (1986)), nor an inference unsupported by the facts set forth in the
complaint. Id. (quoting Kowal v. MCI Commc’ns Corp., 16 F.3d 1271, 1276 (D.C. Cir. 1994)).
III. Analysis
Plaintiff’s Complaint alleges five counts: the first is a claim under § 1983, the second is
one under the APA, and the last three are actually prayers for different types of relief
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masquerading as stand-alone counts. The Court will begin by addressing the APA claim and
then consider the others.
A. APA Claim
Plaintiffs’ Complaint and their Opposition to the Motion to Dismiss appear to disagree as
to the basis for their APA claim. Compare Compl. at 19 (citing 5 U.S.C. § 706(2)(C)), with Pl.
Opp. at 7 (quoting case that quotes 5 U.S.C. § 706(2)(A)). Defendants’ Motion treats the count
as one under § 706(2)(A), which the Court agrees is the appropriate standard. (Section
706(2)(C), conversely, deals with whether the agency has acted in excess of its authority.)
The Administrative Procedure Act “sets forth the full extent of judicial authority to
review executive agency action for procedural correctness.” FCC v. Fox Television Stations,
Inc., 556 U.S. 502, 513 (2009). It requires courts to “hold unlawful and set aside agency action,
findings, and conclusions” that are “arbitrary, capricious, an abuse of discretion, or otherwise not
in accordance with law.” 5 U.S.C. § 706(2)(A). Agency action is arbitrary and capricious if, for
example, the agency “entirely failed to consider an important aspect of the problem, offered an
explanation 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 product of agency
expertise.” Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43
(1983). Under this “narrow” standard of review, an agency is required to “examine the relevant
data and articulate a satisfactory explanation for its action including a ‘rational connection
between the facts found and the choice made.’” Id. (quoting Burlington Truck Lines v. United
States, 371 U.S. 156, 168 (1962)). Courts “have held it an abuse of discretion for [an agency] to
act if there is no evidence to support the decision or if the decision was based on an improper
understanding of the law.” Kazarian v. U.S. Citizenship and Immigration Servs., 596 F.3d 1115,
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1118 (9th Cir. 2010) (quoting Tongatapu Woodcraft Hawaii Ltd. v. Feldman, 736 F.3d 1305,
1308 (9th Cir. 1984)). Put another way, the court’s role is only to “consider whether the decision
was based on a consideration of the relevant factors and whether there has been a clear error of
judgment.” Am. Oceans Campaign v. Daley, 183 F. Supp. 2d 1, 4 (D.D.C. 2000) (quoting
Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416 (1971)).
It is not enough, then, that the court would have come to a different conclusion from the
agency. See Oceana, Inc. v. Pritzker, 24 F. Supp. 3d 49, 58 (D.D.C. 2014) (citing Steel Mfrs.
Ass’n v. EPA, 27 F.3d 642, 646 (D.C. Cir. 1994). The reviewing court “does not substitute its
own judgment for that of the agency.” Id. A decision that is not fully explained, moreover, may
be upheld “if the agency’s path may reasonably be discerned.” Bowman Transp., Inc. v.
Arkansas-Best Freight Sys., Inc., 419 U.S. 281, 286 (1974). It is only these “certain minimal
standards of rationality” to which a reviewing court holds an agency. See Nat’l Envtl. Dev.
Ass’ns Clean Air Project v. EPA, 686 F.3d 803, 810 (D.C. Cir. 2012) (quoting Ethyl Corp. v.
EPA, 541 F.2d 1, 36–37 (D.C. Cir. 1976) (en banc)).
In the present case, DHS contends that a further layer of deference is applicable — viz.,
that which applies to an agency’s interpretation of its own regulations. See MTD at 4 (citing
Stinson v. United States, 508 U.S. 36, 45 (1993)). But even if this standard — sometimes called
Auer deference or Seminole Rock deference — applies where, as here, the Court must determine
which of two regulations applies, that deference “can arise only if a regulation is genuinely
ambiguous.” Kisor v. Wilkie, 139 S. Ct. 2400, 2414 (2019). In this case, however, as shown
below, the Court finds that 8 C.F.R. § 103.2(a)(7)(i) unambiguously applies to AAO appeals.
Auer deference is thus unnecessary in this instance.
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The parties’ central disagreement here is over which regulation applies to the timing of
AAO appeals. Plaintiffs believe that the timeliness of appeals should be determined according to
8 C.F.R. § 103.8(b), which reads:
(b) Effect of service by mail. Whenever a person has the right or is
required to do some act within a prescribed period after the service
of a notice upon him and the notice is served by mail, 3 days shall
be added to the prescribed period. Service by mail is complete upon
mailing.
This is the governing regulation for their appeals, Plaintiffs argue, because it is “incorporated by
reference into [AAO’s] Form [I-290B] Instructions.” Pl. Opp. at 8. Those instructions read, in
relevant part:
Timeliness. In most cases, you must file your appeal or motion
within 30 calendar days of the date of service of the adverse decision
(or within 33 calendar days if we mailed the decision to you). . . .
NOTE: If we sent you the decision by mail, the “date of service” is
the date we mailed the decision, not the date you received it. See 8
CFR 103.8(b). Decisions are normally mailed the same day they are
issued.
Dep’t of Homeland Sec., Instructions for Notice of Appeal or Motion, https://
www.uscis.gov/sites/default/files/files/form/i-290binstr.pdf (emphasis omitted).
Defendants, on the other hand, posit that the applicable regulation is 8 C.F.R.
§ 103.2(a)(7)(i), which provides:
USCIS will consider a benefit request received and will record the
receipt date as of the actual date of receipt at the location designated
for filing such benefit request whether electronically or in paper
format.
The term “benefit request” “means any application, petition, motion, appeal, or other request
relating to an immigration or naturalization benefit.” Id. § 1.2 (emphasis added).
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DHS’s reading is undoubtedly the correct one. In the most unambiguous terms,
§ 103.2(a)(7)(i) states that a “benefit request” — which includes an appeal, id. § 1.2 — is
deemed received “as of the actual date of receipt at the location designated for filing” (emphasis
added). Clearly, this is the rule that was meant to apply to the timing of appeal submissions.
The fact that the form instructions cite § 103.8(b) when discussing the date of service for
the breach notice does nothing to change this. There is no indication that this citation is meant to
apply the mailbox rule of § 103.8(b) to determine when the appeal is filed, and to do so would
violate the very interpretive canon Plaintiffs cite. See Pl. Opp. at 10 (“[A] ‘statute should be
construed so that effect is given to all its provisions, so that no part will be inoperative or
superfluous, void or insignificant.”) (quoting Citizens for Responsibility & Ethics in Washington
v. FEC, 316 F. Supp. 3d 349, 391 (D.D.C. 2018)). Defendants’ position is also bolstered by the
fact that the AAO’s publicly available Practice Manual and prior rulings are consistent with their
interpretation. See U.S. Citizenship and Immigration Servs., AAO Practice Manual § 3.7(c)(2)
(Mar. 11, 2019), https://www.uscis.gov/tools/practice-manual/chapter-3-appeals (“The filing
date for an appeal is the day the USCIS location designated for filing the appeal receives it, not
the date the appellant mailed the appeal.”); see, e.g., Matter of L-I-S-C, 2015 WL 7687020, at *2
(AAO Nov. 4, 2015) (“The date of filing is not the date of mailing, but the actual date of receipt
at the designated filing location.”) (citing 8 C.F.R. § 103.2(a)(7)(i)).
Given the soundness of DHS’s interpretation of its unambiguous regulations, the Court
finds that, as a matter of law, AAO’s rejection of Plaintiffs’ appeals as untimely was not
“arbitrary and capricious.” Plaintiffs therefore fail to state an APA claim upon which relief can
be granted.
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B. Section 1983 / Due-Process Claim
The companies also raise a claim against Defendants under 42 U.S.C. § 1983, see
Compl. at 19, which provides a civil cause of action for violations of federal constitutional or
statutory rights committed by persons acting “under color of any statute, ordinance, regulation,
custom, or usage, of any State or Territory or the District of Columbia.” The problem with this
count, as Defendants rightly note, is that here it is being asserted against federal actors. It
therefore cannot proceed. See Davidson v. U.S. Dep’t of State, 728 F. App’x 7, 7–8 (D.C. Cir.
2018) (citing Dist. of Columbia v. Carter, 409 U.S. 418, 424 (1973)). Appearing to realize this,
Plaintiffs concede in their Opposition that the invocation of § 1983 in their Complaint was
“erroneous[]” and argue instead that they meant to allege direct constitutional claims of
procedural and substantive due-process violations under the Fifth Amendment. See Pl. Opp. at
13.
Even construed as “direct” due-process claims, however, they are permeated with
additional infirmities. To begin, they fail to articulate any legal wrong beyond Plaintiffs’ APA
claims. The Complaint states only that “Defendants’ actions in attempting to label timely
submitted appeals as untimely filed deprives Plaintiffs of their due process rights.” Compl.,
¶ 47; see also id., ¶ 42 (“Based on all the facts of support this Count [sic], Defendants violated
Plaintiffs’ procedural and substantive due process rights.”). Their Opposition to the Motion to
Dismiss provides some more detail, arguing that “Defendants’ application of the mailbox rule
violates Plaintiffs’ due process rights as it violates the APA.” Pl. Opp. at 13. The few sentences
that follow appear to confirm that Plaintiffs are contending that a violation of the APA alone
gives rise to a violation of the Due Process Clause. Id. (maintaining that Defendants violated
their due-process rights “[f]or the reasons set forth in Section[s] I and II above” — that is, the
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sections of Plaintiffs’ brief articulating their APA claims — and because DHS interpreted its
regulation “contrary to its plain meaning” and “arbitrarily and capriciously applied this rule to
[their] appeals”).
This novel legal theory holds no water, since both the substantive and the procedural
rights protected by the Due Process Clause require a party to fulfill distinct legal elements. See,
e.g., Dist. Attorney’s Office v. Osborne, 557 U.S. 52, 71–72 (2009). More specifically, plaintiffs
making a procedural due-process claim must show that: (1) they were deprived of a protected
interest, and (2) they did not receive the process they were due. Barkley v. U.S. Marshals Serv.
ex rel. Hylton, 766 F.3d 25, 31 (D.C. Cir. 2014) (quoting UDC Chairs Chapter v. Bd. of
Trustees, 56 F.3d 1469, 1471 (D.C. Cir. 1995)); see also Mathews v. Eldridge, 424 U.S. 319,
332–33 (1976). Less than a month ago, however, this Court specifically found that Statewide is
not “due” DHS’s acceptance of late appeals. Statewide III, 2019 WL 5579970, at *5. And since
this Opinion has just found that their appeals were indisputably late, see supra Section III.A, any
procedural due-process claim is foreclosed.
Similarly, no viable substantive due-process claim exists either, since Plaintiffs have not
identified what right of theirs might have been violated, and the bar for recognizing a new such
right is high: “As a general matter, the [Supreme] Court has always been reluctant to expand the
concept of substantive due process because guideposts for responsible decisionmaking in this
unchartered area are scarce and open-ended.” Osborne, 557 U.S. at 72 (quoting Collins v.
Harker Heights, 503 U.S. 115, 125 (1992)); see also Rosales-Mireles v. United States, 138 S. Ct.
1897, 1906 (2018) (“[I]n a [substantive] due process challenge to executive action, the threshold
question is whether the behavior of the governmental officer is so egregious, so outrageous, that
it may fairly be said to shock the contemporary conscience.”) (first alteration in original)
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(quoting Cty. of Sacramento v. Lewis, 523 U.S. 833, 847 n.8 (1998)). Without any articulation
of even what right Plaintiffs claim, the Court cannot find that Defendants’ action “shock[s] the
contemporary conscience.” Rosales-Mireles, 138 S. Ct. at 1906 (quoting Lewis, 523 U.S. at 847
n.8). Plaintiffs therefore state neither a procedural nor a substantive due-process claim upon
which relief can be granted.
C. Remaining Counts
The final three counts of Plaintiffs’ Complaint are mislabeled prayers for relief. Count
III is titled a “Claim for Declaratory Relief” for APA and due-process violations, see Compl. at
20; Count IV alleges a “Claim for Injunctive Relief” for the same violations, id. at 22; and Count
VI (presumably meant to be Count V) purports to state a claim for attorney fees. Id. at 23.
These “counts” each present not “a freestanding cause of action, but rather — as [their]
moniker[s] make[] clear — a form of relief to redress the other claims asserted by Plaintiff.”
Base One Techs., Inc. v. Ali, 78 F. Supp. 3d 186, 199 (D.D.C. 2015). Since the Court here
dismisses the actual substantive counts, the three prayers for relief must fall as well.
IV. Conclusion
For the foregoing reasons, the Court will grant Defendants’ Motion to Dismiss. A
contemporaneous Order so stating will issue this day.
/s/ James E. Boasberg
JAMES E. BOASBERG
United States District Judge
Date: November 26, 2019
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