ASSE International, Inc. v. Kerry

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ASSE INTERNATIONAL, INC., No. 14-56402
Plaintiff-Appellant,
D.C. No.
v. 8:14-cv-00534-
CJC-JPR
JOHN F. KERRY, Secretary of State of
the United States; ROBIN LERNER,
Deputy Assistant Secretary of State OPINION
for Private Sector Exchange, Bureau
of Educational and Cultural Affairs;
UNITED STATES DEPARTMENT OF
STATE,
Defendants-Appellees.
Appeal from the United States District Court
for the Central District of California
Cormac J. Carney, District Judge, Presiding
Argued and Submitted
February 2, 2015—Pasadena, California
Filed October 9, 2015
Before: Dorothy W. Nelson, Jay S. Bybee,
and Sandra S. Ikuta, Circuit Judges.
Opinion by Judge Bybee
2 ASSE INT’L V. KERRY
SUMMARY*
Administrative Procedure Act / Due Process
The panel reversed the district court’s dismissal of
ASSE International’s claims, alleging violations of the
Administrative Procedure Act and the Due Process Clause of
the Fifth Amendment, and challenging the Department of
State’s sanctions imposed against ASSE for violating various
regulations associated with the Exchange Visitor Program
that allows nationals to participate in temporary cultural and
educational exchange programs in the United States.
The panel held that the State Department’s imposition of
sanctions was subject to Administrative Procedure Act
review. The panel concluded that the State Department failed
to rebut the strong presumption of judicial reviewability
because its regulations provided a “meaningful standard” by
which the court could review its exercise of discretion in
sanctioning ASSE.
Concerning ASSE’s procedural due process claim, the
panel held that the Due Process Clause did not mandate trial-
type proceedings in this case. The panel further held that the
State Department did not provide ASSE adequate procedural
protections because ASSE did not have a meaningful
opportunity to rebut significant portions of the evidence that
the State Department used against it. The panel remanded to
the district court to decide in the first instance whether ASSE
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
ASSE INT’L V. KERRY 3
had a protected property interest, and if so, whether the due
process violation it suffered was harmless error.
COUNSEL
Ira J. Kurzban (argued), Edward F. Ramos, Kurzban Kurzban
Weinger Tetzeli & Pratt P.A., Miami, Florida, for Plaintiff-
Appellant.
Alisa B. Klein (argued) and Mark B. Stern, Appellate Staff
Attorneys, Joyce R. Branda, Acting Assistant Attorney
General, André Birotte, Jr., United States Attorney, Beth S.
Brinkmann, Deputy Assistant Attorney General, United
States Department of Justice, Washington, D.C., for
Defendants-Appellees.
OPINION
BYBEE, Circuit Judge:
Congress created the Exchange Visitor Program (EVP) to
allow foreign nationals to participate in temporary cultural
and educational exchange programs in the United States. The
Department of State administers the EVP, with the assistance
of various third-party program sponsors. This case arises out
of sanctions that the Department imposed against one of these
sponsors, ASSE International (ASSE), for violating various
regulations. ASSE challenged the Department’s sanctions
decision in the United States District Court for the Central
District of California, claiming that the agency had acted
arbitrarily and capriciously in violation of the Administrative
Procedure Act (APA), and that it had violated ASSE’s due
4 ASSE INT’L V. KERRY
process rights under the Fifth Amendment. The district court
dismissed the suit as unreviewable under the APA because
the administration of the EVP is “committed to agency
discretion by law.” 5 U.S.C. § 701(a)(2). It also dismissed
ASSE’s constitutional claims on the grounds that the process
was “fundamentally fair.” We reverse as to both grounds.
I
In the Mutual Educational and Cultural Exchange Act of
1961, Congress authorized the State Department, through the
United States Information Agency “to provide, by grant,
contract, or otherwise, for educational exchanges . . . by
financing visits and interchanges between the United States
and other countries of students, trainees, teachers, instructors,
and professors.” 22 U.S.C. § 2452(a)(1). The State
Department, by regulation, created the EVP to promote
educational and cultural exchanges between the people of the
United States and of other nations. 22 C.F.R. § 62.1(b). The
EVP authorizes various exchange programs for foreign
visitors; as relevant here, the EVP authorizes “work-based”
training programs to expose foreign college graduates “to
American techniques, methodologies, and technologies” in
their fields. Id. § 62.2. The State Department oversees the
EVP but uses third-party program sponsors to select
qualifying visitors, find them educational or training
opportunities, and monitor their welfare during their
programs. See 22 U.S.C. § 2452; 22 C.F.R. §§ 62.1(b), 62.6.
The State Department caps the number of participants in any
given sponsor’s programs by allocating each sponsor a one-
year supply of DS-2019 forms, which are the “Certificate[s]
of Eligibility for Exchange Visitor (J-1) Status.” 22 C.F.R.
§ 62.12(d). Sponsors, in turn, distribute one DS-2019 form
per EVP applicant, and the applicant uses that form to apply
ASSE INT’L V. KERRY 5
for participation in the EVP program. See About DS-2019, J-
1 VISA: Exchange Visitor Program, available at
http://j1visa.state.gov/participants/how-to-apply/about-ds-
2019/. “The Department of State has the sole discretion to
determine the number of Forms DS–2019 to be issued to a
sponsor.” 22 C.F.R. § 62.12(d)(1). ASSE is one such
privately-owned EVP program sponsor and is subject to these
regulations.
The Department’s regulations provide a framework for
implementing the EVP. For instance, a program sponsor
must ensure that the “exchange visitor possesses sufficient
proficiency in the English language . . . to participate in his or
her program.” Id. §§ 62.10(a)(2), 62.22(d)(1). Program
sponsors must ensure that training programs provide “bona
fide training” and are not “used as substitutes for ordinary
employment or work purposes.” Id. § 62.22(b)(1)(ii); see
also id. § 62.22(f)(2)(iii), (v). Similarly, sponsors must not
put “trainees or interns in unskilled or casual labor positions”
or “in positions, occupations, or businesses that could bring
the [EVP] or the Department into notoriety or disrepute.” Id.
§ 62.22(j). Sponsors may assign responsibilities to third
parties, but any violations committed by such third parties are
“imputed to the sponsors” themselves. Id. § 62.22(g)(1).
Thus, the sponsors must “[e]nsure that any host organizations
and third parties . . . are sufficiently educated on the goals,
objectives, and regulations of the [EVP] and adhere to all
regulations.” Id. § 62.22(f)(1)(v).
The State Department’s regulations provide that it may
sanction sponsors if its Office of Exchange Coordination and
Designation makes at least one of four findings: (1) the
sponsor has “[v]iolated one or more” agency regulations;
(2) the sponsor has “[e]videnced a pattern of failure to
6 ASSE INT’L V. KERRY
comply” with the regulations; (3) the sponsor has
“[c]ommitted an act of omission or commission, which has or
could have the effect of endangering the health, safety, or
welfare of an exchange visitor”; or (4) the sponsor has
“conducted its program in such a way as to undermine the
foreign policy objectives of the United States.” Id.
§ 62.50(a).
In its discretion, the Department can determine whether
to impose more serious sanctions (suspension, revocation, or
a denial of redesignation to a sponsor) or “lesser sanctions,”
which can include any combination of a written reprimand, a
mandate that the sponsor submit a corrective action plan to
remedy the violation(s), and up to a 15% reduction in the
number of authorized visitors who may participate in the
sponsor’s programs. Id. § 62.50(b)(1). The regulations
outline the procedure required before “lesser sanctions” may
be imposed: the Department must give the program sponsor
written notice of its intent to impose lesser sanctions, after
which the sponsor has ten days to respond with “a statement
in opposition to or mitigation of the sanction,” which “may
include additional documentary material.” Id. § 62.50(b)(2).
Then the Department “may, in its discretion, modify,
withdraw, or confirm” the sanctions outlined in its initial
notice. Id.
ASSE has been an EVP program sponsor for nearly four
decades, serving thousands of exchange visitors each year.
In 2009, ASSE contracted with a third party, American
Career Opportunities (ACO), to assist ASSE with exchange
visitors from Japan. ASSE also approved The Cream Pot
restaurant in Hawaii as a host organization. In accordance
with EVP regulations, ASSE alleges that it “fully vetted” both
organizations before contracting with them, and ASSE
ASSE INT’L V. KERRY 7
outlined all of the Department’s requirements in the
contracts.1 Id. § 62.22(g). Further, ASSE alleges that it
provided extensive training to ACO personnel to be sure that
they were “sufficiently educated on the goals, objectives, and
regulations of the” EVP. Id. § 62.22(f)(1)(v).
ACO assisted ASSE with the recruitment and placement
of a 31-year-old Japanese exchange visitor, Noriko Amari,
who began an ASSE-sponsored training program at The
Cream Pot. In February 2012, a few weeks after beginning
her program, Amari contacted the State Department to lodge
a complaint about her training conditions, alleging labor
exploitation, excessive work hours, inadequate compensation
for work performed, and harassment. The State Department
sought an explanation from ASSE regarding Amari’s
troubling claims. ASSE alleges that it immediately tried to
communicate with Amari and offer assistance, but Amari
would not respond to ASSE’s attempt to talk to her.
Within weeks, the Department initiated a review of
ASSE’s compliance with the EVP regulations. Based on this
review, the Department determined that sanctions were
warranted because ASSE had violated several regulations. Id.
§ 62.50(a)(1). While the Department conceded that ASSE
had not directly participated in any harassment and that ASSE
had responded to Amari’s complaints appropriately, the
Department determined that ASSE had failed to ensure that
1
ASSE appeals the district court’s dismissal of its complaint on
jurisdictional and failure to state a claim grounds. The government made
a facial challenge to the district court’s exercise of jurisdiction, asserting
that ASSE’s complaint’s allegations were, on their face, insufficient to
invoke jurisdiction, rather than a factual challenge. As such, we treat the
factual allegations in ASSE’s complaint as true. See Courthouse News
Serv. v. Planet, 750 F.3d 776, 779–80 (9th Cir. 2014).
8 ASSE INT’L V. KERRY
Amari had sufficient English to participate in the program,
leaving her vulnerable for abuse—a violation of 22 C.F.R.
§§ 62.10(a)(2)2 and 62.22(d)(1).3 The Department also found
that ASSE had failed to ensure that Amari’s placement was
a genuine training program, not just the fulfillment of a
general labor need—a violation of 22 C.F.R.
§§ 62.22(b)(1)(ii)4 and 62.22(f)(1)(i).5 Finally, the
2
“Sponsors are responsible for the effective administration of their
exchange visitor program(s). These responsibilities include:
(a) Selection of exchange visitors. Sponsors must
establish and utilize a method to screen and select
prospective exchange visitors to ensure that they are
eligible for program participation, and that:
. . . . (2) The exchange visitor possesses sufficient
proficiency in the English language . . . to participate in
his or her program . . .”
3
“In addition to satisfying the general requirements set forth in
§ 62.10(a), sponsors must ensure that trainees and interns have verifiable
English language skills sufficient to function on a day-to-day basis in their
training environment.”
4
“Exchange Visitor Program training and internship programs must not
be used as substitutes for ordinary employment or work purposes . . . .
The requirements in these regulations for trainees are designed to
distinguish between bona fide training, which is permitted, and merely
gaining additional work experience, which is not permitted. The
requirements in these regulations for interns are designed to distinguish
between a period of work-based learning in the intern’s academic field,
which is permitted (and which requires a substantial academic framework
in the participant’s field), and unskilled labor, which is not.”
5
“Obligations of training and internship program sponsors.
(1) Sponsors designated by the Department to
ASSE INT’L V. KERRY 9
Department held ASSE responsible for the conduct of its
third-party organization, ACO, and ACO’s violations of the
regulations—concluding that ASSE violated 22 C.F.R.
§§ 62.9(f)(2)6 and 62.22(f)(1)(v).7 ACO’s conduct and
ASSE’s failure to adequately screen Amari for adequate
English, the Department concluded, endangered Amari’s
health, safety, and welfare, as prohibited by the
regulations—providing an additional reason for sanctions
under 22 C.F.R. § 62.50(a)(3). In reaching these preliminary
conclusions, the Department relied in part on the fact that
the Department of Homeland Security had issued Amari a
administer training and internship programs must:
(i) Ensure that trainees and interns are
appropriately selected, placed, oriented, supervised, and
evaluated.”
6
“Staffing and support services. Sponsors must ensure that:
. . . . (2) Their employees, officers, agents, [and]
third parties . . . associated with the administration of
their exchange visitor program are adequately qualified,
appropriately trained, and comply with the Exchange
Visitor Program regulations.”
7
“Obligations of training and internship program sponsors.
(1) Sponsors designated by the Department to
administer training and internship programs must:
. . . . (v) Ensure that any host organizations and
third parties involved in the recruitment, selection,
screening, placement, orientation, evaluation for, or the
provision of training and internship programs are
sufficiently educated on the goals, objectives, and
regulations of the Exchange Visitor Program and
adhere to all regulations set forth in this Part . . . .”
10 ASSE INT’L V. KERRY
T Visa—a visa for those who are or have been victims of
human trafficking—based on her treatment in the training
program.
In November 2013, the State Department provided ASSE
with a written Notice of Intent to impose sanctions,
describing its findings and the three “lesser sanctions” it
intended to impose: a written reprimand, a requirement that
ASSE provide a corrective action plan, and a 15% reduction
in the number of trainees in ASSE’s program. Pursuant to its
regulations, the Department gave ASSE a ten-day window in
which to respond, and ASSE submitted a written response
with exhibits. The exhibits included Amari’s self assessment
of her own English skills and college transcripts showing her
successful completion of several English courses at a
university in Japan. After considering ASSE’s response, the
Department determined that lesser sanctions were still
warranted, and it issued a final Imposition of Lesser
Sanctions.
ASSE filed a complaint in the Central District of
California, claiming that the Department’s decision to
impose sanctions was arbitrary and capricious and should be
set aside under the APA, 5 U.S.C. § 551 et seq.8 ASSE also
alleged that the Department’s sanctions procedure violated its
due process rights. The State Department filed a motion to
dismiss ASSE’s complaint, arguing that the sanctions
imposed against ASSE were unreviewable because sanctions
decisions are “committed to agency discretion by law” within
the meaning of 5 U.S.C. § 701(a)(2), and asserting that ASSE
had received all the process it was due.
8
Although ASSE raised additional claims before the district court, it is
not pursuing any of those claims on appeal.
ASSE INT’L V. KERRY 11
The district court granted the motion to dismiss. With
respect to ASSE’s APA claims, the district court found that
the statutes authorizing the EVP—22 U.S.C. §§ 2451,
2452(a), and 2455(f)—vested full discretion in the
Department to implement the program in a manner that would
“strengthen international cooperative relations,”9 and that the
EVP regulations at issue here did not limit the Department’s
broad discretionary authority to implement sanctions. The
district court also dismissed ASSE’s due process claim,
finding that ASSE had failed to state a claim because “the
process by which ASSE was sanctioned was fundamentally
fair.” ASSE filed a timely notice of appeal.10
II
ASSE first challenges the district court’s dismissal of the
complaint on the ground that there is no review available
under the APA. See 5 U.S.C. § 701(a)(2).
At the outset, we note the “strong presumption that
Congress intends judicial review of administrative action.”
Helgeson v. Bureau of Indian Affairs, 153 F.3d 1000, 1003
(9th Cir. 1998) (quoting Traynor v. Turnage, 485 U.S. 535,
542 (1988)) (internal quotation marks omitted); see also ANA
Int’l, Inc. v. Way, 393 F.3d 886, 890 (9th Cir. 2004) (“The
default rule is that agency actions are reviewable . . . even if
9
The district court also made a passing reference to “the fact that the
issues involved here squarely implicate foreign relations” as a reason why
it lacked jurisdiction to review ASSE’s claims.
10
“We review de novo the district court’s dismissal for lack of subject
matter jurisdiction.” Tritz v. U.S. Postal Serv., 721 F.3d 1133, 1136 (9th
Cir. 2013). We also review due process questions de novo. United States
v. Harrington, 749 F.3d 825, 828 (9th Cir. 2014).
12 ASSE INT’L V. KERRY
no statute specifically authorizes judicial review.”). “This
presumption is overcome only in two narrow circumstances,”
Pinnacle Armor, Inc. v. United States, 648 F.3d 708, 718–19
(9th Cir. 2011): (1) “when Congress expressly bars review
by statute,” id. at 719; or (2) where an agency action is
“committed to agency discretion by law.” 5 U.S.C.
§ 701(a)(2). The first exception is inapplicable here, but the
Department argues that the second exception applies and that
we are precluded by the APA itself from reviewing the
Department’s decision.
Agency action is committed to agency discretion in those
“rare instances where statutes are drawn in such broad terms
that in a given case there is no law to apply, thereby leaving
the court with no meaningful standard against which to judge
the agency’s exercise of discretion.” Pinnacle, 648 F.3d at
719 (internal quotation marks and citations omitted). In
determining whether an agency decision fits within this
exception, “we consider ‘the language of the statute and
whether the general purposes of the statute would be
endangered by judicial review.’” Id. (quoting Cnty. of
Esmeralda v. Dep’t of Energy, 925 F.2d 1216, 1218 (9th Cir.
1991)). “‘[T]he mere fact that a statute contains discretionary
language does not make agency action unreviewable.’” Id.
(quoting Beno v. Shalala, 30 F.3d 1057, 1066 (9th Cir.
1994)).
The Department argues that, as the district court reasoned,
we are barred from reviewing ASSE’s APA claims for two
reasons: (1) the statute authorizing the Department to
implement the EVP does not limit the Department’s
discretion in any way, and because the EVP “squarely
implicate[s] foreign relations,” judicial review would
undermine the purpose of the program; and (2) ASSE’s
ASSE INT’L V. KERRY 13
claims are “well beyond the scope of any meaningful review
the Court could provide” because the Department’s
regulations do not provide a “meaningful standard” by which
a court could review the Department’s actions. We conclude
that the Department failed to rebut the strong presumption of
judicial reviewability because its regulations provide a
“meaningful standard” by which we can review its exercise
of discretion in sanctioning ASSE.
A. Discretion in the EVP’s Authorizing Statute
In order to assess whether the court has a “meaningful
standard against which to judge the agency’s exercise of
discretion[] . . . we first look at the statute itself.” Helgeson,
153 F.3d at 1003 (citations and internal quotation marks
omitted). The authorizing statute vests the State Department
with discretion to create and fund exchange programs to the
extent that the Department “considers that [they] would
strengthen international cooperative relations.” 22 U.S.C.
§ 2452(a). The decision whether to establish a particular
exchange program lies purely within the Department’s
discretion and is a policy question as to which there is no law
for us to review. See id. §§ 2451, 2452(a). If all we were
asked to review was the decision to create the EVP, there
would be “no law to apply,” Webster v. Doe, 486 U.S. 592,
599 (1988) (internal quotations omitted), because we would
have “no meaningful standard against which to judge the
agency’s exercise of discretion,” Heckler v. Chaney, 470 U.S.
821, 830 (1985).
But ASSE has not asked us to review the decision to
create the EVP. Rather, it has asked us to measure the State
Department’s administration of the EVP against the
Department’s own regulations. This we can do without
14 ASSE INT’L V. KERRY
infringing any of the State Department’s prerogatives under
the statute. “Even where statutory language grants an agency
‘unfettered discretion,’ its decision may nonetheless be
reviewed if regulations or agency practice provide a
‘meaningful standard by which this court may review its
exercise of discretion.’” Spencer Enters., Inc. v. United
States, 345 F.3d 683, 688 (9th Cir. 2003) (quoting
Socop–Gonzalez v. INS, 208 F.3d 838, 844 (9th Cir. 2000)).
Accordingly, we “will find jurisdiction to review allegations
that an agency has abused its discretion by exceeding its legal
authority or by failing to comply with its own regulations.”
Abdelhamid v. Ilchert, 774 F.2d 1447, 1450 (9th Cir. 1985)
(internal quotation marks omitted).
The district court offered a second reason why we cannot
review the State Department’s actions: because “the issues
involved here squarely implicate foreign relations.” Quoting
the Third Circuit, the State Department argues that all “cases
involving the [EVP] necessarily implicate foreign policy
concerns and involve an agency exercising its discretionary
powers in that respect.” Chong v. Dir., U.S. Info. Agency,
821 F.2d 171, 177 (3d Cir. 1987). The Department thus
claims that we are treading in “an area of executive action in
which the courts have long been hesitant to intrude,” and that
judicial review will undermine the foreign policy goals of the
statute. Helgeson, 153 F.3d at 1003 (internal quotation marks
omitted).
But a weak connection to foreign policy is not enough to
commit an agency action to the agency’s discretion. See
Baker v. Carr, 369 U.S. 186, 211 (1962) (“[I]t is error to
suppose that every case or controversy which touches foreign
relations lies beyond judicial cognizance.”); see also, e.g.,
Singh v. Clinton, 618 F.3d 1085, 1092 (9th Cir. 2010)
ASSE INT’L V. KERRY 15
(reversing State Department’s decision to terminate
immigrant’s visa registration).
The Department’s reliance on Chong is misguided and the
quotation taken out of context. Dr. Chong came to the United
States to participate in an EVP for graduate medical training.
Chong, 821 F.2d at 173. At the end of his program, Dr.
Chong was expected to return to Hong Kong, but Dr. Chong
feared that he would not be permitted to practice medicine
there and requested a § 212(e) hardship waiver, 8 U.S.C.
§ 1182(e), so that he and his family could remain in the
United States. Id. at 174. The State Department denied his
request and Chong filed suit. The government, as it has in
this case, claimed that the federal courts could not review the
waiver denial under the APA because there was “no law to
apply.” Id. at 175. The Third Circuit rejected the
government’s position, finding that the State Department had
“adopted regulations which delineate the procedure it must
use to review waiver requests.” 821 F.2d at 176. The court
recognized that its “scope of review of the [State
Department’s] recommendation function under section
1182(e) is severely limited because the statute and the
[Department’s] regulations vest rather broad discretion in the
Director of the USIA,” and reviewed the Department’s
decision for an abuse of discretion. Id. at 176–77.
In the course of its opinion, the Third Circuit commented
that “cases involving the Exchange Visitor Program
necessarily implicate foreign policy concerns and involve an
agency exercising its discretionary powers . . . .” Id. at 177.
But that statement was an explanation for why the court
would not demand “a more particularized explanation” from
the State Department, not a justification for why it could not
review the State Department’s decision. Id. Moreover, the
16 ASSE INT’L V. KERRY
Department’s regulations here are far more detailed than the
statute and regulations at issue in Chong, which addressed
decisions to grant or deny hardship waivers. Chong does not
help the government’s case.
In addition, although the Department claims that “serious
foreign policy consequences . . . could result from judicial
review,” it never explains how judicial review of a sanctions
decision against a U.S.-based program sponsor could
undermine foreign relations or national security in any way.
Cf. Webster, 486 U.S. at 601 (CIA hiring decisions are
unreviewable in part because the “Nation’s security depend[s]
. . . on the reliability . . . of the Agency’s employees”). As
ASSE points out, it is difficult to imagine how Japan would
be offended by federal court review of the State Department’s
decision to impose sanctions on ASSE.
In sum, the statute authorizing the EVP only gives the
State Department the absolute discretion to create or not to
create exchange programs for foreign students, and that
decision is not challenged here. Additionally, we cannot see
that in this instance, judicial review would undermine the
EVP’s foreign policy goals and purposes. We thus turn to
whether the Department’s own regulations erect a standard by
which we may judge its actions.
B. The State Department’s Regulations Provide a
“Meaningful Standard” for Review
We think it evident that the State Department’s
regulations creating the EVP provide more than an ample
basis in law for us to review its decision under the APA. See
22 C.F.R. pt. 62. Those regulations create the program,
§ 62.1(b); define all the relevant terms, § 62.2; provide who
ASSE INT’L V. KERRY 17
is eligible to be a sponsor, §§ 62.3, 62.7–62.8; provide which
foreign nationals may participate, § 62.4; describe the
application process for sponsors, § 62.5; establish the general
obligations of sponsors, §§ 62.9–62.15; describe the rules for
foreign exchange participants, §§ 62.16–62.17, 62.22, 62.43,
62.45; and provide for sanctions against or termination of
sponsors, §§ 62.50, 62.60–62.63. After reviewing these
regulations, it is obvious to us that they establish a
comprehensive scheme for administering an exchange
program. For program sponsors, the regulations have the
force of law, and there are real consequences for failing to
abide by them. Indeed, if the regulations had been enacted as
statutes by Congress, we clearly would have law to apply and
could review the State Department’s actions under the APA.
The fact that the regulations also give the Department
discretion in the administration of the EVP does not prevent
our review. Section 701(a)(2) of the APA precludes review
of agency action “committed to agency discretion by law,”
but this has never been thought to put all exercises of
discretion beyond judicial review. Indeed, “the APA itself
commits final agency action[s] to our review for ‘abuse of
discretion.’” Pinnacle, 648 F.3d at 720 (quoting 5 U.S.C.
§ 706(2)(A)). The abuse of discretion standard is one with
which federal courts are quite familiar, and it is just that—a
legal standard by which we judge the legitimacy of a lower
court’s or an agency’s action. It is a standard of review, not
a bar to review. That said, it is a generous standard that gives
a lower court or an agency leeway in the decisions it makes.
We will reverse under an abuse of discretion standard when
the trier of fact and law “based its ruling on an erroneous
view of the law or on a clearly erroneous assessment of the
evidence.” Cooter & Gell v. Hartmarx Corp., 496 U.S. 384,
405 (1990); see also Bobbitt v. Milberg LLP, __ F.3d __,
18 ASSE INT’L V. KERRY
2015 WL 5255081, at *2 (9th Cir. Sept. 10, 2015) (noting
that a lower court abuses its discretion when it “makes an
error of law, or when it reaches a result that is illogical,
implausible, or without support in inferences that may be
drawn from the record”). Here, where the State Department
has reserved to itself in the EVP certain decisions as within
its “discretion,” see, e.g., 22 C.F.R. §§ 62.41(a), 62.50(b)(1),
or even its “sole discretion,” see, e.g., id. §§ 62.6(a), 62.62,
we will take into account the State Department’s reservation
and expertise and accord it the proper deference. But that
does not deprive us of the right to review its actions for an
abuse of its discretion or to determine if its actions were
otherwise arbitrary and capricious.
Under the State Department’s regulations, sanctions may
be imposed against a program sponsor if the agency
determines that any one of four specified grounds exists. Id.
§ 62.50(a). The agency invoked two of these grounds here.
First, the Department found that ASSE “[v]iolated one or
more provisions” of the agency’s internal regulations.11 Id.
§ 62.50(a)(1). Second, it found that ASSE committed “an act
of omission or commission” that endangered “the health,
safety, or welfare” of Amari. Id. § 62.50(a)(3). ASSE
contests the validity of these findings by arguing that the
agency did not base those findings on sufficient evidence.
This type of challenge—which entails looking at the agency’s
decision-making process to ensure that the agency relied on
11
Specifically, the Department charged ASSE with violating regulations
that (1) require exchange visitors to speak sufficient English to participate
in their programs, (2) prohibit placing exchange visitors for the purpose
of fulfilling a labor need instead of providing a genuine training program,
and (3) require program sponsors to educate and oversee the third parties
that they contract with. We have quoted the regulations, supra notes 2–7.
ASSE INT’L V. KERRY 19
sufficient evidence—is equally within our purview. See, e.g.,
Arrozal v. INS, 159 F.3d 429, 433 (9th Cir. 1998) (granting a
petition for review where the INS provided a “cursory and
generalized analysis of [the petitioner’s] favorable factors”);
Maldonado v. Dep’t of Agric., 154 F.3d 1086, 1088–89 (9th
Cir. 1998) (granting petition for review upon finding that the
Department of Agriculture’s decision was based on
“insufficient evidence”); Dodrill v. Shalala, 12 F.3d 915, 918
(9th Cir. 1993) (reversing the HHS’s determination that
claimant was not disabled based on the ALJ’s reliance on
insufficient evidence). That is so despite the fact that the
State Department’s regulations call upon the agency’s
expertise, judgment, and discretion. See Pinnacle, 648 F.3d
at 720 (“Although the [agency regulations] provide that the
[agency] determines the ‘sufficiency’ of a manufacturer’s
evidence and statements, the [agency regulations] do not give
the [agency] unbridled discretion.”); Newman v. Apfel,
223 F.3d 937, 943 (9th Cir. 2000) (“The fact that an agency
has broad discretion in choosing whether to act does not
establish that the agency may justify its choice on specious
grounds. To concede otherwise would be to disregard entirely
the value of political accountability, which itself is the very
premise of administrative discretion in all its forms.”); Beno,
30 F.3d at 1066 (holding that a HHS decision was reviewable
even though the statute permitted the Secretary to authorize
waivers only “to the extent and for the period the Secretary
finds necessary” and according to the Secretary’s “judgment”
(alteration and emphasis omitted)).
The district court found that ASSE alleged “that the State
Department reached the wrong conclusion in making [its]
findings, and gave weight to the wrong evidence,” and that
whether Amari spoke adequate English to participate in the
EVP or whether ASSE’s contractor, ACO, was properly
20 ASSE INT’L V. KERRY
trained were “questions well beyond the scope of any
meaningful review the Court could provide.” We respectfully
disagree. We do not review agency factfinding de novo
except when specially authorized. 5 U.S.C. § 706(2)(F);
Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S.
402, 414–15 (1971). But that does not mean that we cannot
review agency factfinding at all. We are to review the
Department’s decision to determine whether it was “arbitrary,
capricious, an abuse of discretion, or otherwise not in
accordance with law.” 5 U.S.C. § 706(2)(A). Even though
we are “not empowered to substitute [our] judgment for that
of the agency,” our “inquiry into the facts is to be searching
and careful” and we are to determine “whether there has been
a clear error of judgment.” Overton Park, 401 U.S. at 416.
The APA prescribes the “substantial evidence” test for
review of formal agency proceedings. 5 U.S.C. § 706(2)(E).
We have recognized, however, that “as a practical matter, the
arbitrary and capricious standard incorporates the substantial
evidence test,” and we use that test for review of agency
factfinding in informal proceedings as well. Ursack Inc. v.
Sierra Interagency Black Bear Grp., 639 F.3d 949, 958 n.4
(9th Cir. 2011); see also Wileman Bros. & Elliott, Inc. v.
Espy, 58 F.3d 1367, 1374–75 (9th Cir. 1995), rev’d on other
grounds sub nom. Glickman v. Wileman Bros. & Elliott, Inc.,
521 U.S. 457 (1997). We have said that “[s]ubstantial
evidence means such relevant evidence as a reasonable mind
might accept as adequate to support a conclusion.”
Bonnichsen v. United States, 367 F.3d 864, 880 n.19 (9th Cir.
2004) (citing Richardson v. Perales, 402 U.S. 389, 401
(1971)); see also Baxter v. Sullivan, 923 F.2d 1391, 1394 (9th
Cir. 1991).
ASSE INT’L V. KERRY 21
In sum, we may review the State Department’s final
agency action under the standards prescribed by 5 U.S.C.
§ 706(2)(A). To the extent the petition challenges the
agency’s factfinding, we may review the State Department’s
determinations for substantial evidence.
III
We turn next to ASSE’s due process claim.12 A
procedural due process claim “hinges on proof of two
elements: (1) a protect[ed] liberty or property interest . . . and
(2) a denial of adequate procedural protections.” Pinnacle,
648 F.3d at 716 (quoting Foss v. Nat’l Marine Fisheries
Serv., 161 F.3d 584, 588 (9th Cir. 1998)). ASSE argues that
it has a protected interest in the DS-2019 forms, which are
required for each participant. Because the Department has a
limited number of forms, the Department regulates the
number of participants each sponsor can process.
Consequently, a reduction in DS-2019 forms to a sponsor
effectively reduces the sponsor’s business. The district court
assumed, without deciding, that ASSE had a protected
12
Having found that we may review the State Department’s action under
the APA, we are authorized to “hold unlawful and set aside agency action,
findings, and conclusions found to be . . . contrary to constitutional right,
power, privilege, or immunity; . . . [or] without observance of procedure
required by law.” 5 U.S.C. § 706(2)(B), (D).
We note, however, that even if we had found the State Department’s
action unreviewable under 5 U.S.C. § 701(a)(2), we would still be able to
review its decision insofar as ASSE had raised colorable constitutional
claims, unless Congress precluded such review. “[W]here Congress
intends to preclude judicial review of constitutional claims[,] its intent to
do so must be clear.” Webster v. Doe, 486 U.S. 592, 603 (1988). Nothing
in the Mutual Educational and Cultural Exchange Act of 1961 evidences
such intent.
22 ASSE INT’L V. KERRY
property interest in its allotment of DS-2019 forms, and
dismissed ASSE’s due process claim on the basis that ASSE
failed to state a claim that it was denied adequate procedural
protections. For purposes of this appeal, the State
Department has not contested that ASSE has a property
interest protected by the Due Process Clause. We too will
assume that ASSE has a protected property interest in its
allotment of DS-2019 forms.
The State Department’s regulations mandate that it give
adequate notice of its intent to impose sanctions and that it
invite and consider any response and accompanying evidence.
See 22 C.F.R. § 62.50(b)(2). ASSE concedes that the
Department followed that procedure in large part, but argues
that the procedure itself is inadequate because it does not
allow for an opportunity to confront evidence in a trial-type
setting. In addition, ASSE argues that even if the
Department’s paper-hearing procedure is constitutionally
sufficient, in this instance the procedures were inadequate
because the Department’s Notice of Intent did not provide a
sufficient summary of the evidence against ASSE, and the
Department relied on new evidence when it imposed
sanctions, depriving ASSE of a meaningful opportunity to
rebut.
Following the order of the district court’s analysis, we
will first decide whether the process ASSE received was
fundamentally fair. We agree with the Department that the
Due Process Clause does not mandate trial-type proceedings
here, but we hold that the Department did not provide
adequate procedural protections in this instance.
ASSE INT’L V. KERRY 23
A. ASSE Is Not Entitled to Trial-Type Procedures to
Confront Adverse Witnesses
ASSE argues that it should be able to confront Amari and
any other adverse witnesses in a trial-like setting—including
confrontation and cross-examination of witnesses. But we
conclude that the Due Process Clause does not mandate a
trial-type procedure here.
Due process “is not a technical conception with a fixed
content unrelated to time, place and circumstances.”
Mathews v. Eldridge, 424 U.S. 319, 334 (1976) (internal
quotation marks omitted). Rather, it is “flexible and calls for
such procedural protections as the particular situation
demands.” Id. (internal quotation marks omitted). In
Mathews v. Eldridge, the Supreme Court established a
balancing test for determining how much process is due. It
requires that we consider three factors:
First, the private interest that will be affected
by the official action; second, the risk of an
erroneous deprivation of such interest through
the procedures used, and the probable value,
if any, of additional or substitute procedural
safeguards; and finally, the Government’s
interest, including the function involved and
the fiscal and administrative burdens that the
additional or substitute procedural
requirement would entail.
Id. at 335. A careful consideration of the factors reveals that
while the Department must give ASSE an accounting of the
evidence on which it relied, it need not conduct oral hearings
24 ASSE INT’L V. KERRY
or afford sponsors the opportunity to confront or cross-
examine witnesses.
First, we consider the effects of the Department’s
sanctions decision on ASSE. See id. The imposition of
“lesser sanctions” deprives ASSE of 15% of its DS-2019
forms for one-year and results in a public listing that ASSE
has been sanctioned on the State Department’s website. This
reduction, although temporary, does impact ASSE’s ability to
participate as a sponsor in the EVP and results in some
financial loss. Moreover, the sanctions and the agency’s
underlying findings stay on ASSE’s file with the State
Department permanently, and that record forms the basis for
the agency’s decision to re-designate ASSE as a sponsor in
future years. See 22 C.F.R. § 62.7(c). In addition, ASSE’s
business operates on referrals throughout a global EVP
network, and public sanctions listed online may damage those
relationships. Thus, ASSE’s private rights at stake are
significant, albeit they are less so since the sanctions are
temporary and ASSE’s status as a sponsor is not at issue in
these proceedings.
Second, we consider the risk of erroneous deprivation if
the Department grants ASSE only a paper hearing, as
opposed to other trial-type proceedings. That is, we ask what
is the risk that the State Department, employing its less
formal procedures based on a paper record, will make a
mistake. We conclude that such a risk is low, so long as the
Department affords ASSE a complete paper hearing and
reveals all material evidence it intends to rely on. Our
decision that due process does not require full judicial or
trial-type proceedings is far from novel. See Pinnacle,
648 F.3d at 717; Buckingham v. Sec’y of U.S. Dep’t of Agric.,
603 F.3d 1073, 1082–83 (9th Cir. 2010); United States v.
ASSE INT’L V. KERRY 25
Clifford Matley Family Tr., 354 F.3d 1154, 1162 (9th Cir.
2004); see also Brock v. Roadway Express, Inc., 481 U.S.
252, 266 (1987) (“We conclude, however, that as a general
rule the employer’s interest is adequately protected without
the right of confrontation and cross-examination, again so
long as the employer is otherwise provided an opportunity to
respond at a meaningful time and in a meaningful manner.”
(internal quotation marks omitted)); Goldberg v. Kelly,
397 U.S. 254, 266 (1970) (holding that the constitutionally
required process “need not take the form of a judicial or
quasi-judicial trial”).
ASSE argues that oral cross-examination is especially
important in situations like this one where the evidence
against ASSE comes almost exclusively from one person’s
accusations. But a party’s opportunity to rebut agency
evidence need not come in the form of oral cross-examination
of witnesses. Buckingham, 603 F.3d at 1082–83 (citing
cases); see Brock, 481 U.S. at 266. The opportunity to refute
unfavorable evidence in some fashion, however, is an
“immutable” principle of procedural due process: “[W]here
governmental action seriously injures an individual, and the
reasonableness of the action depends on fact findings, the
evidence used to prove the Government’s case must be
disclosed to the individual so that he has an opportunity to
show that it is untrue.” Greene v. McElroy, 360 U.S. 474,
496 (1959).
We do not insist that the State Department conduct
plenary hearings, even where a sponsor’s interest (like
ASSE’s) in avoiding lesser sanctions is significant. The EVP
26 ASSE INT’L V. KERRY
is a program of limited duration13 for which the State
Department relies on third-party sponsors and their
contributors to administer the program according to the
regulations. Although witness credibility might occasionally
be at issue, violations of the State Department regulations
will, in the main, be established—and investigated—through
paper records, including written witness statements. The
State Department may, of course, determine at any time to
conduct more formal hearings, but sponsors facing lesser
sanctions are not entitled to such a hearing. As we observed
in Pinnacle, “as judges, we tend to favor the kind of hearings
that are familiar to us,” but “[ASSE] has not made the case
that the Due Process Clause demands more formal
proceedings in this case. . . . [T]here is no evidence that live
testimony would improve the quality of the [State
Department’s] decision.” Pinnacle, 648 F.3d at 717.
The third Mathews factor further supports our decision
that trial-type proceedings are not required here. Although
the Department will incur some financial and administrative
cost to conduct a paper hearing and send ASSE a complete
record of its adverse evidence, it would face a much greater
burden if required to engage in trial-type proceedings in cases
which, like this one, involve foreign exchange participants.
We recognize that the Department has an interest in the
expeditious resolution of these claims. The Department has
a strong interest in the comfort and welfare of exchange
visitors according to the EVP’s mandate that it operate to
“strengthen international cooperative relations.” See
22 U.S.C. § 2452(a). The State Department’s regulations for
13
“[T]he maximum duration of a training program is 18 months, and the
maximum duration of an internship program is 12 months.” 22 C.F.R.
§ 62.22(k).
ASSE INT’L V. KERRY 27
administering the EVP “are intended for the protection of the
visitor,” and we acknowledge that it may be very traumatic
for foreign exchange participants to be subjected to
American-style trial procedures, undermining the very goals
of the program. See Beul v. ASSE Int’l, Inc., 233 F.3d 441,
445 (7th Cir. 2000).
Subject to constitutional constraints, an agency has broad
discretion in choosing the form of the proceeding that it will
conduct. Vt. Yankee Nuclear Power Corp. v. Nat. Res. Def.
Council, Inc., 435 U.S. 519, 543–44 (1978). Agencies are
“free to fashion their own rules of procedure and to pursue
methods of inquiry capable of permitting them to discharge
their multitudinous duties.” FCC v. Schreiber, 381 U.S. 279,
290 (1965) (internal quotation omitted). Because we find that
trial-type proceedings are not constitutionally required here,
we leave the question whether to grant ASSE such additional
procedures to the Department’s discretion.
B. The State Department Failed to Provide ASSE a
Meaningful Opportunity to Rebut Key Evidence
Next, we address ASSE’s claim that the paper-hearing
provided inadequate process because it was deprived of a
“meaningful” opportunity to rebut evidence that the State
Department relied on in its imposition of sanctions. Although
we find the question close, for reasons explained below, we
agree.
“The fundamental requisite of due process of law is the
opportunity to be heard[] . . . at a meaningful time and in a
meaningful manner.” Goldberg, 397 U.S. at 267 (citations
and internal quotation marks omitted). And “fundamental
fairness”—the “touchstone” to determining whether a
28 ASSE INT’L V. KERRY
plaintiff received due process, Harrington, 749 F.3d at 828
(quoting Walters v. Nat’l Ass’n of Radiation Survivors,
473 U.S. 305, 320–21 (1985))—“requires that a party against
whom an agency has proceeded be allowed to rebut evidence
offered by the agency if that evidence is relevant,” Carnation
Co. v. Sec’y of Labor, 641 F.2d 801, 803 (9th Cir. 1981). See
Sw. Sunsites, Inc. v. FTC, 785 F.2d 1431, 1436–37 (9th Cir.
1986) (noting that a relevant consideration in a due process
analysis is whether the parties “had an opportunity to rebut”
evidence against them and finding no due process violation,
in part, because the petitioners did have an “opportunity to
respond to the documents” brought against them); see also
Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 542
(1985); Greene, 360 U.S. at 496; Buckingham, 603 F.3d at
1082 (“The base requirement of the Due Process Clause is
that a person deprived of property be given an opportunity to
be heard at a meaningful time and in a meaningful manner.”
(emphasis added) (internal quotation and citation omitted)).
ASSE contends that the State Department withheld
material details from it—details underlying the Department’s
and Amari’s accusations against ASSE and which the
Department later relied on in imposing sanctions.14 ASSE
alleges that by failing to disclose this evidence, the
Department deprived ASSE of a meaningful opportunity to
rebut its accusations.
14
ASSE makes one due process claim that does not fit this mold; it
argues that it supplied the Department with exculpatory evidence—
evidence from a co-trainee who reported positive experiences with her
training—that the Department ignored. We note ASSE’s claim, but we
rely on the more significant claim that ASSE was denied a meaningful
opportunity to rebut the charges against it.
ASSE INT’L V. KERRY 29
1. Summary of Amari’s Interview with the State
Department
First, ASSE argues that the Department relied almost
exclusively on Amari’s own ex parte testimony and that such
testimony was never disclosed to ASSE. ASSE argues that
the Department failed to produce any evidence underlying the
third-party harassment of Amari alleged and cited by the
State Department in the Notice of Intent. ASSE contends that
due process required the Department to give ASSE an
opportunity to confront Amari’s testimonial evidence in some
form, and that the summary the State Department provided
was inadequate.15
The Notice of Intent explains:
Specifically, after a two hour interview on
February 16 with Ms. Amari (speaking only
through an interpreter), the Office determined
that Ms. Amari was being harassed by third
parties – The Cream Pot (host organization),
American Career Opportunity (domestic and
foreign third party), and Global Associates
(foreign third party). Ms. Amari told of
having endured almost 30 separate instances
of harassment, threats regarding her
15
In its Imposition of Lesser Sanctions, the Department noted that
“ASSE does not address this harassment in its Statement.” The
Department might have argued that ASSE had waived this argument about
the third-party harassment claims by “not address[ing] this.” But the
Department did not make this argument in its brief and has thus forfeited
its waiver argument. See United States v. Jacobo Castillo, 496 F.3d 947,
952 n.1 (9th Cir. 2007) (en banc); United States v. Garcia-Lopez, 309 F.3d
1121, 1123 (9th Cir. 2002).
30 ASSE INT’L V. KERRY
immigration status, and threats to her family
if she did not remain silent about the working
conditions imposed by the three third parties.
A summary of evidence may, in certain circumstance,
provide sufficient notice to allow a meaningful opportunity to
respond. See Loudermill, 470 U.S. at 546 (in some
circumstances, due process will be satisfied by an
“explanation of the . . . evidence” and opportunity to
respond). Moreover, unlike other cases where we have found
a summary of testimony inadequate, the State Department’s
summary of the interview did provide many crucial details
about the identity of the interviewee, involved parties, and the
content of the allegations. See, e.g., Kaur v. Holder, 561 F.3d
957, 960–62 (9th Cir. 2009) (summary stating only that
“reliable, confidential sources have reported that [the alien]
has conspired to engage in alien smuggling; has attempted to
obtain fraudulent documents; and has engaged in immigration
fraud by conspiring to supply false documents for others” was
insufficient); see also Greene, 360 U.S. at 496, 508 (failure
to provide information regarding the identity or source of
confidential informant/evidence did not “comport with . . .
traditional ideas of fair procedure”).
Yet, in this case the government does not assert that the
actual interview notes, or transcript, if it exists, from the
interview, are confidential. Thus, the government’s interest
in relying on a summary, rather than providing interview
notes or a transcript, is minimal. On the other hand, had the
Department given ASSE more details about Amari’s
accusations, ASSE claims it may have been able to produce
evidence refuting them. Such evidence may have affected the
Department’s decision as to the severity of sanctions, or
whether to even impose sanctions at all. Furthermore, the
ASSE INT’L V. KERRY 31
Department’s evidence of harassment came solely from
Amari—with no record of any supporting evidence.16 Thus,
the risk of an erroneous decision was heightened, and the
State Department should have provided ASSE with complete
interview notes so it would have an opportunity to rebut the
details of the harassment.
2. ASSE Representative Fei Jiang’s Email
Second, ASSE points to the Department’s reliance on an
email that the Department noted in its Imposition of
Sanctions but did not reference in its Notice of Intent.17 In
16
ASSE also argues that the State Department relied on the fact that
DHS had issued Amari a T Visa. ASSE argues that it did not have access
to evidence presented to DHS and that the DHS proceeding was a “black
box” it could not penetrate. But importantly, the State Department did not
rely on any evidence submitted to DHS and withheld from ASSE. Rather
the State Department relied only on the fact that DHS issued the T Visa
and that the Department should not “ignore the fact that [DHS] considers
Ms. Amari to have shown sufficient evidence of human trafficking while
participating in ASSE’s exchange visitor program.” We find no error in
relying on this fact. The State Department disclosed DHS’s issuance of
the T Visa in its Notice of Intent to impose sanctions, so ASSE had ample
opportunity to explain or rebut that fact.
17
ASSE also argued that it was deprived of a meaningful opportunity for
rebuttal in an additional instance when the Department expanded its
account of its interactions with Amari in its Imposition of Lesser
Sanctions beyond what it relayed in the Notice of Intent to impose
sanctions. In the Notice, the only detail about an interview with Amari on
February 16, 2012 was that the Department representatives spoke to
Amari “only through an interpreter.” But after acknowledging ASSE’s
argument that the use of an interpreter “is not, standing alone, ‘evidence
that [Amari] cannot speak English,’” the Imposition of Lesser Sanctions
elaborated its account, stating that other government officials present at
the meeting had confirmed “that their attempts to converse informally with
Ms. Amari in English without the assistance of the interpreter were to no
32 ASSE INT’L V. KERRY
the February 2012 email to the Department, ASSE
representative Fei Jiang stated that Amari’s “English
appeared to be not at an acceptable level for the purpose of
this program,” and that ACO had been “negligent.”
The State Department cites to this email in a footnote in
its Imposition of Sanctions, concluding that Ms. Jiang
“virtually admitted . . . that Ms. Amari should not have been
selected.” The question of Amari’s English skills was a key
dispute between ASSE and the State Department. And
although ASSE’s claimed ignorance of this email, which was
sent by one of its own employees involved in handling the
State Department’s inquiry into Amari’s status, may trigger
some skepticism, it is true that the State Department did not
rely on or mention that email in the Notice of Intent.
Including its reliance on the email would not be burdensome,
and ASSE alleges that had it been given notice that the
Department would rely on this statement, ASSE could have
explained and rebutted Ms. Jiang’s statement. It argues that
Amari’s apparent lack of English ability was more likely the
result of “instructions by the anti-trafficking organization
representing her not to speak with ASSE staff.” As the State
Department failed to mention this piece of evidence in its
initial Notice of Intent, ASSE was deprived of a meaningful
opportunity to rebut the evidence.
* * *
The State Department does not challenge ASSE’s claims
that it did not get an opportunity to address key evidence.
Instead, it argues that the Due Process Clause does not
avail due to Ms. Amari’s insufficient English,”—a small but significant
detail that ASSE did not have the opportunity to explain or defend against.
ASSE INT’L V. KERRY 33
require it to conduct trial-type proceedings, a claim we
resolved in the previous section. The Department claims that
the paper-hearing process it provided is a “hearing
appropriate to the nature of the case,” and thus
constitutionally sufficient. Loudermill, 470 U.S. at 542
(internal quotation marks omitted).
The government’s argument misses the mark. True, we
have observed that “although due process guarantees ‘some
kind of hearing . . . at some time before a person is finally
deprived of his property interests,’ a full evidentiary hearing
is not required in every case.” Clifford Matley Family Tr.,
354 F.3d at 1162 (quoting Memphis Light, Gas & Water Div.
v. Craft, 436 U.S. 1, 16 (1978); other citations omitted).
Thus, written submissions may be sufficient—and are in this
case—to satisfy the Due Process Clause. See Pinnacle,
648 F.3d at 717; Clifford Matley Family Tr., 354 F.3d at
1162. Here, however, the Notice of Intent did not fully
advise ASSE of the evidence against it, and ASSE was not
given an additional opportunity to respond to the new
evidence once the State Department mentioned this evidence
in the imposition of sanctions. Thus, ASSE was deprived of
any “meaningful” opportunity to rebut some of the State
Department’s adverse evidence.
The Department withheld important evidence that it based
its sanctions on, the primary example being the sparse
evidence underlying Amari’s harassment claims. In its
Notice of Intent to impose sanctions, the Department
provided a very brief summary of Amari’s claims without
producing any evidentiary support, such as the interview
notes or transcript. At the very least, the State Department
should have attached the specific allegations on which it
relied, instead of briefly summarizing Amari’s claim of
34 ASSE INT’L V. KERRY
almost “30 separate instances of harassment.” This
evidentiary showing is not enough to satisfy the due process
requirement that a party receive a meaningful opportunity to
rebut the evidence an agency brings against it. Moreover, the
State Department relied on additional evidence, unmentioned
in the Notice of Intent, when imposing sanctions. ASSE did
not have an opportunity to rebut these pieces of evidence as
they were not mentioned in the Notice of Intent, and ASSE
was not afforded an opportunity to submit a response to the
Imposition of Sanctions.
In sum, because ASSE did not have a meaningful
opportunity to rebut significant portions of the evidence that
the Department used against it, the Department did not afford
it adequate procedural protections. The district court erred in
finding that ASSE failed to state a claim because the process
afforded was fundamentally fair.
Furthermore, the issue of whether ASSE has a protected
property interest was not fully briefed, and as it also has not
been passed upon in the first instance by the district court, we
decline to reach the issue. See Dodd v. Hood River Cnty.,
59 F.3d 852, 863 (9th Cir. 1995). Instead, we remand to the
district court to decide in the first instance whether ASSE has
a protected property interest, and if so, whether the due
process violation it suffered was harmless error. See Al
Haramain Islamic Found., Inc. v. U.S. Dep't of Treasury,
686 F.3d 965, 989 (9th Cir. 2012) (“[The claimant] must
establish that, had it been provided the process it was due, it
could have, and plausibly would have, taken steps to
undermine [the State Department’s imposition of sanctions]
such that [the State Department] would not have [imposed
sanctions] or that substantial evidence would not have
supported the [imposition of sanctions].”).
ASSE INT’L V. KERRY 35
IV
We hold the district court erred in dismissing ASSE’s
complaint. The State Department’s imposition of sanctions
is subject to APA review and ASSE has stated a claim that it
received constitutionally inadequate procedural protections.
Accordingly, we reverse the district court’s dismissal of
ASSE’s claims and remand to the district court for further
proceedings consistent with this opinion. Costs on appeal are
awarded to ASSE.
REVERSED and REMANDED.