STATE OF NEBRASKA DEPARTMENT OF HEALTH AND HUMAN SERVICES, APPELLEE v. DEPARTMENT OF HEALTH AND HUMAN SERVICES AND MICHAEL O. LEAVITT, SECRETARY OF THE DEPARTMENT OF HEALTH AND HUMAN SERVICES, APPELLANTS
No. 04-5429
United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 17, 2005 Decided January 27, 2006
Appeal from the United States District Court for the District of Columbia (No. 03cv01873)
Phyllis D. Thompson argued the cause for appellee. With her on the brief was Jon C. Bruning, Attorney General, Attorney General‘s Office of State of Nebrаska.
Before: GINSBURG, Chief Judge, and GARLAND and BROWN, Circuit Judges.
Opinion for the Court filed by Chief Judge GINSBURG.
GINSBURG, Chief Judge: The United States Department of Health and Human Services (HHS) appeals from a judgment of the district court vacating three policy announcements for lack of notice and comment rulemaking and ordering approval of a cost allocation plan (CAP) submitted by the State of Nebraska Department of Health and Human Services (Nebraska). Because Nebraska challenged only HHS‘s rejection of its proposed CAP, the district court erred in vacating the announcements. The court also abused its discretion when it determined thе CAP should be approved rather than remanding the matter for the Department to reconsider its decision without reference to the policy announcements.
I. Background
The Congress has enacted several statutes aimed at improving child welfare services provided by the sеveral States. Title IV-E of the Social Security Act,
In order to obtain reimbursement under Title IV-E, a State must submit to the HHS Division of Cost Allocation (DCA) a CAP detailing the State‘s expenditures. See
Not surprisingly, therefore, allocation decisions hаve been constrained by those who pay the piper. The federal Office of Management and Budget has instructed the States to allocate their costs so as to produce “an equitable result in consideration of relative benefits derived” by each federаl program. Cost Principles for State, Local and Indian Tribal Governments, 60 Fed. Reg. 26,484, 26,492 (May 17, 1995). The Administration for Children and Families (ACF, formerly ACYF) within HHS, which oversees Title IV-E programs, adopted a similar requirement of proportional allocation in three policy announcements, Allowablе Administrative Costs of the Foster Care Program Under Title IV-E of the Social Security Act, ACYF-PA-87-05 (Oct. 22, 1987); Federal Financial Participation in the Costs of Training for Employees of the State Title IV-E Agency, Foster Parents, Adoptive Parents and Employees of Private Child Placing and Child Care Agencies, ACYF-PA-90-01 (June 14, 1990); and Allocation of Costs for All Training Under the Title IV-E Program, ACF-IM-91-15 (July 24, 1991), each requiring that States allocate the costs of training child welfare workers “to Title IV-E, State foster care and other State/Federal programs in such a manner as to assure that each participating рrogram is charged its proportionate share of the costs.”
Despite the ACF‘s repeated instruction to allocate costs proportionately, Nebraska submitted a CAP that allocated all the costs of training its PSWs to Title IV-E and the DCA approved it in 1993. In 1996, the DCA realized its mistаke and directed Nebraska henceforth to allocate training costs among all benefitting programs. Nebraska submitted a new CAP but continued to charge all training costs for 1996 through 1999 to Title IV-E. The DCA responded in 1999, invoking the three ACF announcements and directing the State to allocаte its expenditures proportionately among all benefitting programs. Instead, Nebraska challenged the DCA‘s disapproval before the Departmental Appeals Board (DAB), where it argued the three ACF announcements were invalid because they had been issued withоut the notice and comment required for rulemaking by the Administrative Procedure Act,
The State sought declaratory and injunctive relief from the court, to wit: (1) “a declaration that DCA‘s disapproval action and the Board‘s decision upholding DCA‘s action are contrary to law,” and (2) “an injunction restraining HHS from disapproving the State‘s CAP and from refusing to pay 75% of the total costs that Nebraska incurs to train its foster care workers.” Compl. ¶ 10. The court granted summary judgment in favor of Nebraska on the ground that HHS had treated the ACF announcements as “binding rule[s]” without
The district court also determined it could itself “fully resolve[] the issue of the approvability of Nebraska‘s disputed CAP provision.” In order to determine what HHS‘s “previous practice” of approval had been, the court consulted a 1985 policy memorandum written by the Commissioner of the ACYF and a 1984 letter to New York State written by another HHS official.* Based upon those documents the court concluded Nebraska‘s CAP should have been approved.
II. Analysis
On appeal HHS does not challenge the district court‘s ruling that the announcements were invalidly promulgated. Rather it makes three arguments concerning the relief ordered by the court. First, HHS maintains the district court did not actually vacate the three policy announcements because vacatur is not specified in the order accompanying its memorandum opinion. Alternatively, if the district court did vacate the announcements, then it erred. Finally, the district court should have remanded to
HHS, rather than deciding itself, the ultimate question whether to approve Nebraskа‘s CAP in view of the invalidity of the announcements.
A. Were the Announcements Vacated?
Despite the discussion of vacatur in the district court‘s memorandum opinion, HHS maintains that, because
B. Should the Announcements Have Been Vacated?
HHS next argues the district court erred in vacating the policy announcements because Nebraska did not seek an order striking down the announcements “on their face[s].” According to HHS, because Nebraska sought only to overturn the DAB‘s adjudicatory decision concerning its CAP, the proper remedy was to set aside the Board‘s decision and remand the
As is evident from Nebraska‘s complaint, the final agency action challenged in this case wаs the decision of the Board upholding, on the basis of the three announcements, the DCA‘s rejection of Nebraska‘s CAP. See Compl. ¶¶ 37, 44, 48 (failure to approve CAP is “inconsistent with congressional intent” and DAB‘s decision “should be reversed“). Hence the State asked the court to enjоin HHS from rejecting the proposed CAP and from refusing to pay 75% of the costs Nebraska incurred training PSWs. Id. ¶ 10. Nowhere in its complaint did Nebraska request vacatur of the announcements, presumably for good and sufficient reasons. See, e.g., Fair Employment Council of Greater Wash., Inc. v. BMC Mktg. Corp., 28 F.3d 1268, 1273 (D.C. Cir. 1994) (no standing to pursue injunction where plaintiffs failed to allege likelihood defendant would violate their rights in the future).
We have long held that “[a]n injunction must be narrowly tailored to remedy the specific harm shown.” Aviation Consumer Action Project v. Washburn, 535 F.2d 101, 108 (D.C. Cir. 1976); see also Va. Soc‘y for Human Life, Inc. v. FEC, 263 F.3d 379, 393 (4th Cir. 2001) (district court should not have enjoined agency from applying сhallenged regulation to any party when “[a]n injunction covering [plaintiff] alone adequately protects it from the feared prosecution“); Meinhold v. U.S. Dep‘t of Def., 34 F.3d 1469, 1480 (9th Cir. 1994) (error to enjoin DOD from applying regulation to all military personnel where plaintiff “sought only to have his discharge voided and tо be reinstated“); Gulf Oil Corp. v. Brock, 778 F.2d 834, 842-43 (D.C. Cir. 1985) (injunction overbroad where it prohibited disclosure not only of plan in question but also of all “substantially similar” documents). Because Nebraska did not challenge the validity of the ACF announcements apart from their application as binding rules in the case before the Board, and accordingly did not make out a case for continuing relief, the district court abused its discretion in vacating them.
Nebraska‘s reliance upon CropLife America is misplaced. In that case, the petitioners challenged directly, and we vacated, a “directive” the EPA had issued without notice and commеnt rulemaking. 329 F.3d at 878-79. Although vacatur may or may not be appropriate when a rule has been held invalid on a procedural ground, see Allied-Signal, Inc. v. U.S. Nuclear Regulatory Comm‘n, 988 F.2d 146, 150-51 (D.C. Cir. 1993), no analysis of “the seriousness of the [rule‘s] deficiencies” and the “disruptive consequences of an interim change,” id. (internal quotation marks omitted), is either necessary or relevant here, because only the decision, not the rule on which it depends, was challenged.
C. Should the CAP Have Been Remanded?
Finally, HHS argues the district court should have remanded to it the question whether Nebraska‘s proposed CAP would have been approved under its “prеvious practice,” as set forth in the 1984 Letter and the 1985 Memorandum upon which the district court relied. Nebraska insists the court did not need to remand the issue because “[t]he record establishes beyond legitimate dispute ... [that the CAP] was approvable.”
The wisdom of this course is brought home by examination of Nebraska‘s claim that the proposed CAP certainly would have been approved under the HHS guidelines previously in use. Although the 1985 Memorandum allows training to be charged entirely to Title IV-E when at least 85% of thаt training is “directed toward” a Title IV-E program, that crucial phrase may be susceptible to more than one interpretation. And it is for HHS to interpret its own policies in the first instance, see Aulenback, Inc. v. FHA, 103 F.3d 156, 162-63 (D.C. Cir. 1997), subject only to quite deferential review by the courts, Carus Chem. Co. v. EPA, 395 F.3d 434, 439 (D.C. Cir. 2005). The district court‘s decision to approve the CAP was inconsistent with this allocation of authority between the agency and the court.
III. Conclusion
The district court erred when it ordered relief beyond prohibiting the DCA and the DAB from relying upon the three ACF announcements in determining whether to approve Nebraska‘s CAP. Therefore, we remand this case to the district court for further proceedings consistent with this opinion.
So ordered.