United States Department of Treasury v. National Treasury Employees Union Chapter 73United States Department of Treasury v. National Treasury Employees Union Chapter 73
UNITED STATES DISTRICT COURT EASTERN DISTRICT OF KENTUCKY NORTHERN DIVISION
(at Covington)
UNITED STATES )
DEPARTMENT OF TREASURY, ) Civil Action No. 2: 25-049-DCR
)
Plaintiff, )
)
V. )
)
NATIONAL TREASURY EMPLOYEES ) MEMORANDUM OPINION UNION, CHAPTER 73, ) AND ORDER
)
Defendant. )
*** *** *** ***
Plaintiff United States Department of the Treasury (“Treasury”) has filed a Complaint seeking a Declaratory Judgment. It asks the Court to hold that it may rescind or repudiate a collective bargaining agreement with Defendant National Treasury Employees Union, Chapter 73 pursuant to President Donald J. Trump’s Executive Order, 14,251, Exclusions from Federal Labor Management Relations Program . Treasury contends that rescission or repudiation of the agreement would be a valid exercise of the President’s authority under 5 U.S.C. § 7103(b)(1). Treasury makes a good argument on the merits. However, it does not have standing to bring the action in this forum under the facts presented. As a result, this action will be dismissed.
I. Background
Historically, the president has “regulated labor relations in the federal government and
internal matters of unions representing federal government employees” by executive order.
See, e.g.
,
Local 1498, AFGE v. AFGE, AFL/CIO
,
The statute also provides a mechanism for an employee or a union to file a grievance in accordance with the negotiated grievance procedure. 5 U.S.C. § 7121. A union or employee may file a charge with the Federal Labor Relations Authority [1] (“FLRA”). See 5 U.S.C. § 7118(a)(1). After a hearing regarding whether an unfair labor practice has occurred, the FLRA may order a cease and desist of the unfair labor practice, require parties to renegotiate a collective bargaining agreement, require reinstatement of a terminated employee, or other such action to carry out the chapter’s purpose. 5 U.S.C. § 7118(a)(6)– (7). The FLRA’s final orders are appealable to the United States Court of Appeals for the District of Columbia or to any circuit where the aggrieved party resides or transacts business. 5 U.S.C. § 7121(a).
When Congress enacted the FSLMRS, it exempted certain agencies and provided that: The President may issue an order excluding any agency or subdivision thereof from coverage under [the statute] if the President determines that—(A) the agency or subdivision has as a primary function intelligence, counterintelligence, investigative, or national security work, and (B) the provisions of [the statute] cannot be applied to that agency or subdivision in a manner consistent with national security requirements and considerations.
5 U.S.C. § 7103(b)(1). Since its inception, every president except President Joseph Biden has used this power to exclude agencies and/or subdivisions. [Record No. 12 at 1] For example, in 1979, President Jimmy Carter excluded more than forty-five agencies or agency subdivisions by executive order. Exec. Order No. 12,171, 44 Fed. Reg. 66,565 (Nov. 20, 1979). That said, no president has exempted entire cabinet-level agencies before now. [Record No. 26 at 3] Prior to leaving office, the Biden Administration renegotiated several collective bargaining agreements to extend into President Donald J. Trump’s second term. [Record No. 1 at ¶ 32] (explaining that the 2022 National Agreement is in effect until October 1, 2027).
On March 27, 2025, President Trump issued Executive Order 14,251, Exclusions from Federal Labor Management Relations Program (“ Exclusions ”) [2] removing roughly a dozen agencies and departments from FSLMRS, including the United States Department of the Treasury (“Treasury”), except for the Bureau of Engraving and Printing. [Record No. 15-1 at 4] provides that each of the impacted agencies and subdivisions, has as “a primary function intelligence, counterintelligence, investigative, or national security work” and that the FSLMRS cannot be applied to them in a “manner consistent with national security requirements and considerations.” Exec. Ord. 14,251, 90 Fed. Reg. 14,553 (Apr. 3, 2025). Earlier that same day, the Office of Personnel Management (“OPM”) issued guidance [3] for implementing Exclusions including that those covered “are no longer required to collectively bargain with Federal unions.” [Record Nos. 12 at 5 and 15-1 at 5] The OPM guidance also directed agencies to submit a report to the President of outlining other agencies and subdivisions that should likewise be excluded under § 7103(b)(1) within thirty days. [Record No. 15-5] And on the same day Exclusions was released, the Administration also released a related Fact Sheet addressing, in part, its rationale for the Executive Order. [4] [Record No. 22- 4]
The following day, Treasury filed this Complaint for Declaratory Relief seeking a declaration that it has the power to terminate its national collective bargaining agreement and other supplemental agreements (collectively “CBAs”) with Defendant National Treasury Employees Union, Chapter 73 (“Chapter 73”) pursuant to because it is a valid exercise of the President’s authority under the exclusion provision in FSLMRS, 5 U.S.C. § 7103(b)(1). [ See Record No. 1 at ¶¶ 9, 12, 63.] More specifically, the action “seeks a declaration limited to Chapter 73 ‘as to all of the agreements that are named in’ the Complaint.” [Record Nos. 24 at 74–76 and 31 at 13] The CBAs at issue include the Internal Revenue Service (“IRS”) and National Treasury Employees Union’s (“NTEU”) 2022 National Agreement and the 2025 Addendum to the National Agreement, both of which apply to IRS employees nationwide. [Record No. 1 at ¶ 44] Additionally, there are local agreements and memorandums of understanding executed between Chapter 73 and the IRS. Id. at ¶ 29.
Chapter 73 is headquartered in Covington, Kentucky, and represents over two thousand IRS employees in this district. [Record No. 12 at 2] In 2024, thirty Chapter 73 union stewards expended over 15,000 hours of official time for union activities. Id. at 7–8. And there are presently over thirty open grievances filed by Chapter 73 against Treasury for actions taken to manage its workforce. Id.
In addition to this civil matter, [5] the remaining agencies and subdivisions [6] removed from the FSLMRS by Exclusions , filed a lawsuit in the United States District Court for the Western District of Texas seeking declaratory relief that they also may terminate their respective CBAs with the American Federation of Government Employees local chapters. United States Department of Defense, et al. v. American Federation of Government Employees, AFL-CIO, District 10, et al. , No. 6:25-cv-119 (W.D. Tex. Mar. 27, 2025) [7] . That lawsuit was filed on the same day as Exclusions but before it was released to the public. See id. United States District Judge Alan D. Albright set a hearing on the pending motions for June 6, 2025. Id.
On the heels of union lawsuits challenging Exclusions , the Chief Human Capital Officers Council (an interagency forum led by the OPM Director) circulated a Frequently Asked Questions document (“FAQs”) addressing agency inquiries concerning the implementation of . [Record No. 12 at 6] The FAQs made clear that agencies should wait until litigation is concluded before terminating collective bargaining agreements or filing decertification petitions. [Record No. 12-1 at 18] But by that time (April 8, 2025), all automatic withdrawals from federal employees’ paychecks for union dues had ceased and all agency office space and official duty hours for union activities was terminated. [Record No. 24 at 77–78]
On April 2, 2025, this Court set a hearing on Treasury’s Complaint for Declaratory Relief for April 25, 2025. Before the hearing, Treasury filed a motion for summary judgment on the merits; Chapter 73 moved to dismiss under Rules 12(b)(7) and 12(b)(3) of the Federal Rules of Civil Procedure for improper venue or alternatively, to transfer the case to the United States District Court for the District of Columbia and failure to join an indispensable party (Chapter 73’s parent union NTEU) respectively; and Chapter 73 tendered a motion for summary judgment for lack of subject matter jurisdiction or alternatively, dismissal for an inappropriate request for declaratory relief. [Record Nos. 12, 15, and 22] During oral argument, the parties addressed the merits, venue, indispensable party, and issues of subject Government Employees, AFL-CIO, et al. v. Trump et al. , No. 3: 25-cv-03070 (N.D. Cal. Apr. 3, 2025) making similar arguments.
matter jurisdiction. [Record No. 24] Following the hearing, the motions were fully briefed by the parties.
A few days after Treasury filed this action, NTEU filed suit against the Trump Administration seeking declaratory and injunctive relief regarding the implementation of . Nat’l Treasury Emps. Union v. Trump, et al. , No. 1: 25-cv-00935 (D.D.C. Mar. 31, 2025). A hearing was set for April 23, 2025, on NTEU’s motion for a preliminary injunction, and United States District Judge Paul L. Friedman granted that motion two days later. Id. In compliance with that order, paycheck deductions for union dues and agency space and official time for union activities have been reinstated. [Record No. 27 at 6] Treasury filed a notice to appeal that order to the United States Court of Appeals for the District of Columbia Circuit which remains pending.
II. Legal Standard
Summary judgment is appropriate if there is no genuine dispute as to any material fact
and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). A fact
is “material” if the underlying substantive law identifies the fact as critical.
Anderson v.
Liberty Lobby, Inc.
,
- 7 -
III. Analysis
The parties disagree regarding the Court ’s subject matter jurisdiction to grant declaratory relief. More specifically, they dispute whether a case or controversy existed at the time the Complaint was filed. Treasury contends that there has been -- and continued to be after the release of Exclusions -- an actual controversy between Chapter 73’s enforcement of the CBAs and Treasury’s implementation of the President’s initiatives. [Record No. 27 at 19] Conversely, Chapter 73 insists that no controversy existed at the time the action was in itiated because Exclusions had not yet been enforced and any conflict between the parties in abiding by the existing contracts cannot amount to an Article III case or controversy (or injury). [Record Nos. 22 at 9–13 and 30 at 2–3] Treasury indicates that Exclusions was partially enforced, which created an Article III case or controversy. [Record No. 27 at 5, 12] And, of course, Chapter 73 disagrees. It insists that had not been enforced when the Complaint was filed and that it is not an independent legal entity that can be sued. [Record No. 22 at 3] In response, Treasury notes that Chapter 73 participates in formal arbitration, files taxes in its own name, and has assets apart from its parent NTEU similar to other legal entities. [Record No 27 at 14]
The parties also disagree regarding whether Treasury experienced any cognizable actual or threatened injury. Treasury alleges that the CBAs constrain its ability to hire and manage employees by delegating vital decision-making to grievance arbitrators, which impinges upon the President’s responsibility and efforts to protect the United States; the CBAs impose demanding burdens on Treasury that ultimately undermine the President’s ability to oversee the Executive Branch and promote national security; the CBAs allow hostile unions to freeze the status quo for protracted periods of time, which undermines national security
- 8 -
because it limits the President’s authority to supervise his agents; and the CBAs bind Treasury until they expire or are renegotiated and take precedence over conflicting agency orders. [Record No. 1 at ¶¶ 2, 29–31, 36–37, 58] Chapter 73 insists that such obligations cannot amount to a cognizable injury because they are based on the existing contracts and are not sufficiently coercive. [Record No. 30 at 2]
Treasury further contends that it faces a threatened injury if it repudiates the CBAs and terminates Chapter 73 employees, who may then file grievances, which could result in the FLRA or Circuit Court ordering reinstatement, backpay, and attorneys’ fees. [Record No. 27 at 6] But Chapter 73 argues that such an injury is just too speculative. [Record No. 30 at 3– 4]
Both sides dispute the causal connection and redressability requirements for standing. Treasury provides that, because Chapter 73 is tasked with enforcing the CBAs in this district, if Treasury receives the requested relief ( i.e. , a declaration that it has the power to repudiate the CBAs as to Chapter 73), then its actual and threatened injury would be no more, and it would be free to implement the President’s initiatives. [Record No. 27 at 8, 11] Chapter 73 insists that NTEU is the true defendant here, not Chapter 73, because it has no authority to file a grievance without NTEU’s consent, NTEU is the exclusive bargaining representative, and Chapter 73 acts only under delegated authority. [ See Record No. 22 at 2–3.] Therefore, any relief provided to Treasury as it pertains to Chapter 73 would fail to redress its alleged injury because it would not bind NTEU. Id. at 15. Further, because IRS employees have other relief avenues apart from the CBAs, even with a declaratory judgment, the risk of backpay would not be redressed. [Record No. 30 at 4]
- 9 -
a. Subject Matter Jurisdiction - Cases and Controversies
Article III of the United States Constitution limits federal courts’ subject matter
jurisdiction to “Cases” and “Controversies.” U.S. Const. art. III, § 2. More specifically,
federal courts are authorized “to deliver judgments on real disputes, not hypothetical ones, to
resolve concrete disputes, not to pronounce judgments on theoretical disputes that may or may
not materialize and, if they do, may appear in a variety of forms.”
Saginaw Cnty., Michigan
v. STAT Emergency Med. Servs., Inc.
,
“The requirements of Art. III are not satisfied merely because a party requests a court
of the United States to declare its legal rights, and has couched that request for forms of relief
historically associated with courts of law in terms that have a familiar ring to those trained in
the legal process.”
Valley Forge Christian Coll. v. Americans United for Separation of Church
& State, Inc.
,
- 10 -
Bd. of Commissioners
,
“‘One element of the case-or-controversy requirement’ is that plaintiffs ‘must establish
that they have standing to sue.’”
Clapper v. Amnesty Int’l USA
,
The “judicial power of the United States defined by Art. III is not an unconditioned
authority to determine the constitutionality of legislative or executive acts.”
Valley Forge
Christian Coll.
,
- 11 -
constitutional.
White v. United States
,
The Declaratory Judgment Act provides federal courts with authority to “declare the
rights and other legal relations of any interested party seeking such declaration.” 28 U.S.C. §
2201(a). The Act, however, does not alter the “essential requisites for the exercise of judicial
power” nor does it “otherwise enable federal courts to deliver an expression of opinion about
the validity of laws.”
Saginaw Cnty.
,
Standing Generally
Three threshold requirements must be shown for a plaintiff to have standing: (1) “injury
in fact,” (2) “a causal connection between the injury and the conduct complained of,” and (3)
a likelihood that “the injury will be ‘redressed by a favorable decision.’”
Carman v. Yellen
,
- 12 -
to expand the record, does not permit the use of post-complaint events to retroactively generate
standing.”). This rule has no exceptions; and therefore, “‘if a plaintiff lacks standing at the
time the action commences,’” then that plaintiff is not entitled “‘to a federal judicial forum.’”
Id
(quoting
Friends of the Earth, Inc. v. Laidlaw Env’t Servs. (TOC), Inc.
,
The requirement that a claim must be ripe and not moot also bears on the temporal
element of standing. While ripeness also includes prudential considerations, the
“constitutional elements of ripeness encompass traditional parts of the standing inquiry:
namely, whether a plaintiff ‘is threatened with “imminent” injury in fact.’”
Carman
, 112 F.4th
at 400 (quoting
MedImmune, Inc.
, 549 U.S. at 128 n.8 (quoting
Lujan
, 504 U.S. at 560))).
“Ripeness separates those matters that are premature because the injury is speculative and may
never occur from those that are appropriate for the court’s review.”
Safety Specialty Ins. Co.
,
“‘The party invoking federal jurisdiction’ must establish these elements commensurate
with the burden of proof required at each stage of a litigation.”
Carman
,
When a defendant mounts a facial challenge to subject matter jurisdiction based on a
lack of standing, the court treats “the allegations in those pleadings as true.”
Christian
Healthcare Centers, Inc.
,
The dearth of “specific facts” in Treasury’s response to Chapter 73’s Motion for
Summary Judgment could be explained by its application of the “plausible” standard necessary
to survive a
motion to dismiss
for standing. [Record No. 27 at 6] (quoting
Christian Healthcare
Centers, Inc.
,
Chapter 73 raises a factual attack regarding Treasury’s standing to bring this action. More specifically, it alleges that no case or controversy existed at the filing of the Complaint because no enforcement actions were taken against Chapter 73. [Record No. 22 at 12] Chapter 73 explains that less than twenty-four hours elapsed between the release of Exclusions and the Complaint’s filing. Id. Moreover, the Complaint is devoid of any allegation that Treasury attempted to enforce Exclusions . Id. Therefore, Chapter 73 insists that Treasury seeks an impermissible advisory opinion requesting that the Court bless its future enforcement action. [Record Nos. 22 at 12 and 30 at 5]
Chapter 73 correctly notes that Treasury’s Complaint fails to allege that it enforced Exclusions against Chapter 73 or NTEU. Instead, the Complaint provides the actions Treasury wishes to take pursuant to Exclusions . [ See Record No. 1 at ¶ 10.] (“Plaintiff wishes to rescind or repudiate those agreements[.]”). The Complaint references the OPM guidance (issued the same day as ) “encouraging the agencies and subdivisions covered by the Executive Order to take appropriate steps toward terminating their previously negotiated CBAs” but does not state that any steps had been taken or that such terminations had occurred prior to the filing of the Complaint. Id.
Treasury implied during oral argument and in its filings that enforcement had
commenced, but it never specified against whom or when. Indeed, Treasury points to no
“specific facts” by affidavit or otherwise that those actions had commenced by the Complaint’s
filing.
Clapper
,
Construing the facts and all reasonable inferences in its favor, Treasury has not
provided “persuasive evidence” that
Exclusions
was enforced against Chapter 73 when the
Complaint was filed.
Ohio Nat. Life Ins. Co.
,
(2) Injury in Fact
Concrete and Particularized
“‘First, the plaintiff must have suffered an injury in fact—an invasion of a legally
protected interest which is (a) concrete and particularized and (b) actual or imminent, not
conjectural or hypothetical.’”
Carman
,
Treasury suggests that its concrete injuries are those that stem from the CBA’s constraints. [Record No. 27 at 5–6] But Chapter 73 contends that Treasury seeks an advisory opinion because it asks the Court to declare that the actions it wishes to take are lawful. [Record No. 22 at 11] While Treasury does not address this issue directly, it suggests that its injury is particularized because a declaration in its favor would affect its future behavior toward Chapter 73. [ See Record No. 27 at 27.] According to Chapter 73, however, Treasury fails to point to any particular action it has taken against it. [Record No. 22 at 13–14]
Actual or Imminent – Not Hypothetical or Conjecture
In the absence of actual injury, “threatened injury” can satisfy the imminence
requirement if it is “‘certainly impending,’ or there is a ‘substantial risk’” that the harm will
occur.”
Susan B. Anthony List v. Driehaus
,
Treasury cites to
White v. United States
for the proposition that a sufficient injury may
be demonstrated “by establishing actual present harm or a
significant possibility
of future
harm, even though the injury-in-fact has not yet been completed.” (Emphasis added); [Record
No. 27 at 4] (citing
White
,
While a “significant possibility” denotes a higher showing than an “objectively reasonable likelihood,” it requires a lower showing than “substantial risk.” Further, Clapper and Saginaw County appear to foreclose the “significant possibility of future harm” standard articulated in White . (Emphasis added). But in this instance, the issue does not turn on which standard applies because Treasury has failed to show a sufficient harm or injury for Article III standing.
Treasury argues that it experienced actual harm by Chapter 73 enforcing the CBAs in the past, present, and possible future enforcement despite the President’s lawful exercise in . [Record No. 27 at 6–8] Further, it contends that it may be subject to significant backpay if it terminates employees but is later ordered to reinstate them. Id. at 6. Chapter 73 denies that this constitutes imminent or threatened injury because it is too speculative, and the injuries Treasury claims are not sufficiently coercive. [Record No. 30 at 2–4]
Analogous Cases
Rather than address the parties’ arguments for Article III standing one-by-one, the
undersigned will compare those arguments against ones raised in analogous cases. Because
the “difference between an abstract question and a ‘controversy’ contemplated by the
Declaratory Judgment Act is necessarily one of degree,” it “would be difficult, if it would be
possible, to fashion a precise test for determining in every case whether there is such a
controversy.”
Maryland Cas. Co.
,
Start with Saginaw County, Michigan v. STAT Emergency Medical Services, Inc. , 946 F.3d 951 (6th Cir. 2020). There, the Sixth Circuit faced an issue like the one presented in this case. Saginaw County had an ordinance allowing only one ambulance service to operate at a time within the County. Id. at 953. Since 2009, the County maintained a service contract with Mobile Medical Response. Id. But in 2011, despite the ordinance, STAT Emergency Medical Services (“STAT”) proceeded to also offer its services within the County in a particular township. Id. Then in 2013, STAT threatened to sue if the contract with Mobile Medical Response was renewed by the County and alleged that the ordinance violated “state law, federal antitrust law, and the Fourteenth Amendment.” Id. The contract was renewed, and three years later, the County codified the exclusivity arrangement by ordinance. Id.
STAT sought to expand its services beyond the township, but the County continued to insist that only the Board of Commissioners had the authority to permit that expansion. Id. at 954. STAT continued to maintain that Michigan law authorized it to serve more areas in the County. Id. But before the County ever enforced its ordinance against STAT (to prevent its operation in that one township), it sought a “declaratory judgment that Michigan law authorizes its exclusive contract with Mobile Medical and that the County does not violate federal antitrust laws or the U.S. Constitution by prohibiting STAT from operating in the county.” Id. Never reaching the merits, the district court determined that “the County failed to establish an actual or imminent injury and dismissed the case for lack of jurisdiction.” Id. And the Sixth Circuit affirmed.
Because the case was dismissed at the pleading stage, the County needed only to
“plausibly allege facts that, ‘under all the circumstances, show that there is a substantial
controversy, between parties having adverse legal interests, of sufficient immediacy and reality
to warrant the issuance of a declaratory judgment.’”
Id.
(quoting
MedImmune, Inc.
, 549 U.S.
at 127). To determine whether the County had met that burden, the panel assessed standing
three different ways, two of which are relevant here:
[9]
(1) the County as a private entity,
asserting a private right; and (2) the County as a public body, asserting public rights. In
denying standing under either scenario, the panel made clear that “[e]ach one asks us to do
something we cannot.”
Saginaw Cnty.
,
Private Rights: The “first way” looked at the County as any other private party asserting contract or property rights. See id. at 954, 956. While STAT had threatened to take legal action six years prior, it had not done so. Id. at 954. Distinguishing that scenario from the one presented in MedImmune , the panel noted the difference in the harms alleged. Id. at 955.
In
MedImmune
, a patent licensee paid royalties under protest believing that the subject
patent was invalid.
Id
. The
MedImmune
Court determined that the penalties faced for
breaching the contract were sufficiently coercive.
See id.
(citing
MedImmune, Inc.
, 549 U.S.
at 137). There, the “licensee faced a choice between paying the licensing fees now or
potentially paying treble damages,” attorney’s fees, and being enjoined from selling a product
that represented roughly 80 percent of its total revenue later.
Saginaw Cnty.
,
But for the County, it was not at risk of paying damages from a Sherman Antitrust Act
claim, and the Local Antitrust act barred STAT from recovering damages, interest thereof, or
attorney’s fees.
Saginaw Cnty.
,
In another attempt to establish harm, the County argued that its contract with Mobile Medical Services required the County to indemnify it against any claims challenging the exclusivity provision. In finding no impending injury, the panel noted that “the County may not bootstrap standing by ‘inflicting harm on’ itself—adding an indemnity clause—‘based on [its] fears of hypothetical future harm.’” (Addition in original); id. (quoting Clapper , 568 U.S. at 416).
Applying the analysis in
Saginaw County
here compels a similar result. As an initial
matter, the undersigned acknowledges the differing stages of litigation in both cases. In
Saginaw County
, because the standing issue was resolved on a motion to dismiss, the plaintiff
only needed to “
plausibly
allege facts . . . to warrant the issuance of a declaratory judgment.’”
(Emphasis added);
Saginaw Cnty.
, 946 F.3d at 954. In the present case, the issue of
justiciability was raised by Chapter 73 in its Motion for Summary Judgment. [Record No. 22]
Therefore, to survive summary judgment, Treasury “can no longer rest on . . . mere allegations,
but must set forth by affidavit or other evidence
specific facts
” to show a justiciable
controversy. (Emphasis added);
Clapper
,
Much like Saginaw County, Treasury believes it has a valid law ( Exclusions ) that authorizes it to terminate its contracts (the CBAs) with Chapter 73. While it implied that it partially implemented in the less than 24 hours between the Executive Order and the filing of this action, it sought to do more. Saginaw County also partially implemented its new ordinance when it insisted that STAT seek Board approval before servicing additional townships, but it too wanted to do more (terminate the contract between STAT and that township). And so, it sought declaratory relief that the termination would not violate the law, much like Treasury seeks in this case. Ultimately, the district court and Sixth Circuit panel agreed that the County failed to establish an actual or imminent injury.
The Sixth Circuit reasoned that the impending injury in MedImmune was inapposite to the one the County faced. In MedImmune , the penalties for breaching the contract were sufficiently severe (treble damages and loss of 80% of its revenue), whereas the County’s were not. Relevant to this analysis was that the County could not incur damages or attorney’s fees under the law. In the present case, Treasury indicates that it may be subject to reinstatement of employees, backpay, and attorneys’ fee awards. But none of those compare to what the claimant in MedImmune faced, and they are inherently remedial, not punitive.
Further, the arguable “penalties” Treasury alleges that it faces are not coercive, self- inflicted, and too speculative. Treasury’s feared future injuries are loss of taxpayer funds in backpay, [10] IRS manhours, and attorneys’ fees if terminated employees are subsequently reinstated. [Record No. 27 at 6, 9] (“The Department should not have to make the difficult choice of acting at its (and American taxpayers’) peril in order to clarify its rights under the law.”); see also [Record No. 24 at 77] (arguing that Treasury could incur “a huge bill on behalf of the American taxpayer for back pay for employees who it tried to terminate and did not get any work out of for the money that it would then have to expend”). Although Treasury may face grievances, lawsuits, delay, or “labor strife” if it fully enforces , none of those rise to the level of coercion in MedImmune . There, the Court made clear that coercion for breaching the contract must be sufficiently severe to qualify as a case or controversy for Article III purposes. MedImmune, Inc. , 549 U.S. at 129–30 (outlining examples such as criminal prosecution, forfeiting one’s farm, treble damages, etc.).
While extant CBAs inherently create impediments to swift reductions in force,
Treasury may not generate standing by inflicting harm upon itself by terminating employees
and risking losing the value of those employees’ work if it is made to reinstate and backpay
them. [Record No. 24 at 76–77] As the panel reasoned in
Saginaw County
, regarding the
County’s indemnity provision in its contract with the exclusive ambulance service, a
declaratory plaintiff “may not bootstrap standing by ‘inflicting harm on’ [his or herself] ‘based
on [his or her] fears of hypothetical future harm.’”
Saginaw Cnty.
,
Additionally, these “penalties” cannot amount to threatened injuries because they are
more akin to generalized grievances which lack the requisite particularity Article III demands.
All. for Hippocratic Med.
, 602 U.S. at 381 (quoting
Lujan
, 504 U.S. at 560). Generalized
grievances, such as those incurred by taxpayers, are “inconsistent with ‘the framework of
Article III’ because ‘the impact on [a plaintiff] is plainly undifferentiated and “common to all
members of the public.”’”
Lujan
,
As was true for the County, Treasury’s claimed threatened injuries are too speculative.
STAT had threatened six years prior that it would sue the County to challenge the ordinance
for being unlawful. But the panel reasoned that the County pled “nothing more than a
‘speculative fear’ that STAT might institute a lawsuit at some time in the future.”
Saginaw
Cnty.
, 946 F.3d at 955 (quoting
Clapper
, 568 U.S. at 410). Treasury provides a similarly
speculative theory to show its threatened injury: if it enforces
Exclusions
to terminate
employees, Chapter 73 could file a grievance and the FLRA may order (and the Circuit Court
may affirm) reinstatement and backpay, which would result in the loss of value for the work
during the period that the employees were terminated. [Record No. 27 at 6] But this theory
rests on a series of hypothetical occurrences that lack the concreteness necessary to define the
scope of the dispute to be fit for judicial review. And such a “speculative chain of possibilities”
fails to establish that Treasury’s potential injury “is certainly impending or is fairly traceable”
to Chapter 73.
Clapper
,
Indeed, it is possible that Chapter 73 files grievances in response to Treasury’s
hypothetical terminations, but it is also possible that it does not. Yet if it does, it is possible
the FLRA sides with the union and orders reinstatement, backpay, and attorneys’ fees, but it
is possible it does not. And if the FLRA sides with the union and Treasury appeals to the
Circuit Court, it is possible that the panel agrees with the FLRA, but it remains possible that it
does not. The Supreme Court has “been reluctant to endorse standing theories that require
guesswork as to how independent decisionmakers will exercise their judgment” because it is
“‘just not possible for a litigant to prove in advance that the judicial system will lead to any
particular result.’”
Clapper
,
The same is true for any injuries Treasury alleges that it faces by not repudiating the CBAs. Unlike the claimant in MedImmune who faced ongoing royalty payments under the contract along with stiff penalties for breach, Treasury provides that it must continue using the grievance and bargaining process under the CBAs. Which, it insists, interferes with its ability to implement the Trump Administration’s national security initiatives in a swift manner. While MedImmune did not directly confront the issue of whether existing contractual obligations could amount to an Article III injury, in the footnotes, the Court clarified that the limiting principle to its holding was the presence of coercion above and beyond any pre- existing requirement in the contract. MedImmune, Inc. , 549 U.S. at 120 n.9, 134 n.12 (explaining “the relevant coercion is not compliance with the claimed contractual obligation, but rather consequences of failure to do so”). Here, Treasury’s alleged injuries stem from its compliance with the CBAs.
Public Rights: The “second way” of assessing Saginaw County’s claims fared no better. The panel explained that the County, as a public body, “has authority that private companies and individuals do not.” Saginaw Cnty. , 946 F.3d at 955. A government’s sovereign right allows it to use lawful coercion to get “its way—by enacting a law on behalf of the people and enforcing it against unwilling residents.” Id. This difference changes the calculus when it comes to actual injuries the government faces. For a government, actual injuries “do not conventionally arise until the government has enacted a law, enforced it against a resident, and the resident has refused to comply.” Id. at 956. “[O]nly then, it would seem, does the sovereign sustain a cognizable injury—at least when it comes to enforcing public rights as opposed to enforcing the County’s private contract or property rights.” Id.
Supporting this conclusion, the panel referenced United States v. West Virginia , 295 U.S. 463, 471–72 (1935), which considered the United States’ sovereign right “under the Constitution to control navigable waters.” Saginaw Cnty. , 946 F.3d at 956. There, the sovereigns had a “difference of opinion” concerning whether certain bodies of water were “navigable waters.” United States v. West Virginia , 295 U.S. at 473. And both claimed a superior right to the waters based on their differing interpretations.
Regarding threatened injuries, the panel clarified that, “[u]ntil the [United States’] right
asserted is threatened with invasion by acts of the state, which serve both to define the
controversy and to establish its existence in the judicial sense, there is no question presented
which is justiciable by a federal court.”
Id.
Because the United States’ sovereign right over
navigable waters was not “threatened with invasion” (or actually invaded) by West Virginia,
its Complaint for declaratory and injunctive relief raised an issue “too vague and ill-defined to
admit of judicial determination.”
Id.
;
Saginaw Cnty.
,
While Treasury implies that it enforced [12] Exclusions in the 24 hours prior to the filing of this suit by ceasing union payroll deductions and ousting union stewards from agency office space, it does not contend that Chapter 73 somehow invaded (or threatened to invade) its sovereign right to enforce the Executive Order. [ See Record Nos. 24 at 77–78 and 27 at 12.] Indeed, it provides “no persuasive evidence” nor points to any specific facts that it had enforced Exclusions against Chapter 73 when it filed its Complaint. Ohio Nat. Life Ins. Co. , 922 F.2d at 326. Because Chapter 73 raises a factual attack to standing, no presumption of truth applies to Treasury’s pleadings, and this Court must “weigh the conflicting evidence to arrive at the factual predicate that subject matter jurisdiction exists or does not exist.” Id. at 325.
There are three issues with Treasury’s omission. First, if no enforcement was in effect
(
i.e.
, no case or controversy) at the time the Complaint was filed, then Treasury sought an
impermissible advisory opinion. Second, if enforcement had commenced, Treasury makes no
showing that Chapter 73 invaded or threatened to invade its sovereign right to enforce the law.
And third, it is Treasury’s burden to show standing commensurate with the present stage of
litigation. Here, summary judgment requires more than
plausibly
alleging standing.
Carman
,
Perhaps acknowledging the shaky grounds on which it alleges standing, Treasury advances an alternate theory of harm in its response. Compare [Record No. 1 at ¶ 9] (“In light of the Executive Order . . . Plaintiff now seeks a declaratory judgment. . .that it has the power to rescind or repudiate [the CBAs].”) with [Record No. 27 at 19] (“The Department’s claim is not based on signing of the Executive Order or any potential agency-wide recission of CBAs.”). It argues that the source of its injury occurred long before Exclusions was issued. The injury alleged is Chapter 73 enforcing the CBAs, which “currently restrict [Treasury] from managing its workforce under the current Administration’s policies.” Id. at 8–9 (“At the time Complaint here was filed, the . . . Department suffered—and continues to suffer—“actual present harm” from Defendant’s union activity within this district, as Chapter 73 is responsible for enforcing the CBAs against the Department here.”). It insists that the “injuries posed by the CBAs and their conflict with Executive Order 14,251 actually existed at the time the Complaint was filed and persist now.” Id. at 11. Treasury argues that the harm it faces is Chapter 73’s “threat of enforcement ,” (despite not pointing to any specific threat) of the CBAs’ provisions. (Emphasis in original); Id. at 8. Treasury contends that Chapter 73 continues to act “under the belief that the CBAs remain valid,” which is the present controversy. Id. at 19. But standing is assessed at the filing of the Complaint, and neither the Court nor a litigant may use post hoc events to retroactively confer standing.
In making this threat of enforcement argument, Treasury overlooks its inherent sovereign power to enforce . It does not cite (and the undersigned cannot find) any case in which the government seeks a declaratory judgment premised on a non-sovereign’s threat of enforcement against the government . This is likely so because a government’s sovereign right allows it to use lawful coercion to get its way, which makes it distinct from private parties. Saginaw Cnty. , 946 F.3d at 955. Further, as mentioned previously, MedImmune clarified that its holding did not cover claimed injuries from existing contractual obligations. Simply put, Treasury attempting to hang its hat on Chapter 73’s potential threat of enforcing the CBAs (as written) stretches the requirement of actual or threatened injury too far.
Another useful case in distinguishing “private rights” and “public rights” as they pertain
to sovereigns is
United States v. State of California
,
The Court also considered standing for the sovereign rights asserted. Id. The United States asserted two such rights: “to exercise power and dominion . . . to protect this country . . . incident to the fact that [it] is immediately adjacent to the ocean” and its responsibility to manage “relations with other nations.” Id. at 28. The determination that the United States asserted the proper exercise of these constitutional responsibilities coupled with California’s previous and ongoing extraction and use of shoreline oil, led the Court to declare that the United States had the “paramount right and power” over the land. See id. at 25, 29, 41.
That case does not change the result for Treasury because the “private right” controversy only existed once California actually invaded the United States’ sovereign “public right” to control the shoreline. Likewise, assuming Treasury has a right to terminate its CBAs pursuant to and OPM Guidance, it still must show that Chapter 73 had actually invaded (or threatened to invade) that right at the time the Complaint was filed. Ashwander , 297 U.S. at 324–25 (“[A]ssumed potential invasions of rights are not enough to warrant judicial intervention.”); Christian Healthcare Centers, Inc. , 117 F.4th at 849 (citations and quotations omitted). That Treasury fails to do.
The result is the same under
Public Utilities Commission of State of California v. United
States
.
In that case, the armed forces of the United States lost a right that it previously possessed ( i.e. , the right to have equipment shipped at a reduced rate without state interference). Further, abiding by the new statute would almost certainly result in shipping delays because a proposed reduced rate first required Commission approval. See id. 544–45. Even more, failure to follow that statutory process could result in the responsible federal officials being thrown in the county jail. Such a stiff penalty coupled with the Commission’s expression of its intent to prosecute was, therefore, sufficiently coercive.
Treasury has not pointed to any specific right that it once had but now has lost or is at risk of losing. Nor does it identify any new burden placed upon it by Chapter 73. Instead, it argues that the terms of the existing CBAs are the source of its injuries , e.g. , needing to participate in the grievance process and provide space and official time for union stewards under the CBAs. [Record No. 27 at 8] But it fails to provide support for how the status quo under those CBAs can confer Article III standing. Again, because Treasury cannot merely allege injury from its pre-existing contractual obligations arising from the CBAs, it cannot show sufficiently coercive conduct engaged in or threatened by Chapter 73.
(3) Causal Connection and Redressability
The causal connection and redressability requirements for standing are best understood
in tandem due to their interconnectedness.
All. for Hippocratic Med.
,
- 34 -
Similarly, redressability requires that it “be ‘likely,’ as opposed to merely ‘speculative,’
that the injury will be ‘redressed by a favorable decision.’”
Id.
(quoting
Lujan
, 504 U.S. at
561). More specifically, redressability requires that a declaratory judgment affect the
“behavior of the defendant towards the plaintiff.”
Safety Specialty Ins. Co.
,
The inability of Treasury to identify a cognizable injury sufficient for Article III is further exemplified when applying the causation and redressability analyses. As an initial matter, counsel for Treasury clarified during oral argument that it sought a narrow scope of relief. Despite the apparent breadth of its Complaint, Treasury seeks a declaration that pursuant to and OPM Guidance, it may rescind or repudiate the CBAs (2022 National Agreement, 2025 Addendum, and various local agreements) as applied only to Chapter 73—not NTEU or any other chapter. [Record No. 24 at 74–76] Treasury argues that because Chapter 73 is tasked with enforcing and implementing the CBAs in this district, it has caused Treasury’s injuries, i.e. , filing grievances, requiring Treasury to provide space for union stewards and pay them during official time, and the CBAs’ strictures. And therefore, if this Court declared that Treasury no longer needed to abide by the CBAs as they pertain to Chapter 73, its injury would be redressed.
Chapter 73 contends that it possesses no powers apart from its parent NTEU. In support of this contention, it references the NTEU’s bylaws and constitution as well as the 2022 National Agreement regarding the role and authority of local chapters. [Record No. 22 at 2– 3] It provides that NTEU is the exclusive representative for Treasury employees and holds exclusive bargaining rights. Id. at 3. Further, it argues that because NTEU is not a party to this matter, it would not be bound by the judgment, which means Treasury’s injury will not be redressed. Id. at 16 . Regarding Treasury’s argument about backpay, Chapter 73 offers that beyond the CBAs, “terminated federal employees have numerous independent protections that could entitle them to backpay”; and therefore, declaratory relief will not redress that feared injury. [Record No. 30 at 4] (citing 5 U.S.C. § 5596(b)).
If this Court granted the narrow declaratory relief as requested, Treasury’s alleged injuries would not be redressed. The onerous impediments the CBAs create would persist nationwide with only a small portion of IRS employees outside of the CBAs. Treasury would still have to engage in the bargaining process and reductions in force requirements or risk being subject to serial grievances, reinstatements, backpay, and attorneys’ fee awards. It would still face legal uncertainty and potential “labor strife” despite a declaration in its favor.
IV. Conclusion
Notwithstanding its laudable goals, Treasury lacks standing to bring this action against
Chapter 73. Much like the declaratory judgment plaintiff in
Saginaw County
, looking to
Treasury’s claim under its private or public rights leads to the inescapable conclusion that
“[e]ach one asks [this Court] to do something [it] cannot.”
Saginaw Cnty.
,
ORDERED as follows:
1. Defendant National Treasury Employees Union, Chapter 73’s Motion for Summary Judgment [Record No. 22] is GRANTED to the extent it alleges that Treasury lacks standing but DENIED as moot to the extent it alleges an improper use of the Declaratory Judgment Act.
2. The remaining pending motions: Defendant National Treasury Employees Union Chapter 73’s Motion to Dismiss [Record No. 15] and Plaintiff United States Department of the Treasury’s Motion for Summary Judgment [Record No. 12] are DENIED as moot.
Dated: May 20, 2025.
[1] The FLRA is a quasi-judicial body comprised of three full-time members whom the president appoints for fixed five-year terms. 5 U.S.C. § 7104; U.S. FLRA, The Authority: About Us , https://www.flra.gov/ components-offices/components/authority.
Notes
[2] The White House, Exclusions from Federal Labor Management Relations Program , Executive Orders, (Mar. 27, 2025), https://www.whitehouse.gov/presidential- actions/2025/03/exclusions-from-federal-labormanagement-relations-programs; Exec. Ord. 14,251, 90 Fed. Reg. 14,553 (Apr. 3, 2025)).
[3] U.S. Office of Personnel Management, Memorandum , (Mar. 27, 2025), https://www.opm.gov/policy-data-oversight/latest-memos/guidance-on-executive-order- exclusions-from-federal-labor-management-programs.pdf.
[4] The White House, Fact Sheet: President Donald J. Trump Exempts Agencies with National Security Missions from Federal Collective Bargaining Requirements , (Mar. 27, 2025), https://www.whitehouse.gov/fact-sheets/2025/03/fact-sheet-president-donald-j-trump- exempts-agencies-with-national-security-missions-from-federal-collective-bargaining- requirements/.
[5] While the government did not seek a declaratory judgment regarding the foreign service employees affected by Exclusions under the Foreign Service Labor-Management Relations Statute, 22 U.S.C. 4103(b), the American Foreign Service Association union, filed suit against the government seeking a preliminary injunction. American Foreign Service Association v Trump, et al. , No. 1:25-cv-1030 (D.D.C. Apr. 7, 2025).
[6] The plaintiffs include: the Department of Defense (DOD), the Department of Agriculture (USDA), the Environmental Protection Agency (EPA), the Department of Homeland Security (DHS), the Department of Housing and Urban Development (HUD), the Department of Justice (DOJ), the Social Security Administration (SSA), and the Department of Veterans Affairs (VA).
[7] Much like NTEU’s preliminary injunction lawsuit filed days after , i.e. , the D.C. case, AFGE along with several other impacted unions filed suit in American Federation of
[8] Treasury has since ceased implementing Exclusion pursuant to a preliminary injunction issued by the United States District Court for the District of Columbia in NTEU v. Trump , No. 25-cv-935, docket entry 32 (D.D.C. Apr. 25, 2025).
[9] The third way addressed the applicability of arising under jurisdiction limitations to the
County that already applied to states.
Saginaw Cnty.
,
[10] It is a strain to conceptualize a hypothetical award of backpay as coercive, an injury, or harm because it is inherently remedial in nature, not punitive. Rather, the backpay constitutes what Treasury would have had to pay regardless (of its decision to terminate employees), which hardly can be construed as “harm.”
[11] It is certainly understandable from an efficiency standpoint why Treasury may want to avoid the time, cost, and legal uncertainty associated with taking coercive action to enforce . But finding standing under those circumstances would open the door for any government entity to first seek authorization from a court before enforcing laws. Saginaw Cnty. , 946 F.3d at 957 (“A contrary rule would open the door to piecemeal adjudication, encourage contrived lawsuits, and require the federal courts to stare down countless advisory- opinion requests as government claimants rush to the federal courthouse for pre-enforcement advice.”). Crucially, such a result would undermine the separation of powers so carefully crafted by this country’s founders. The tension Treasury seeks to be free from was deliberately imposed and intentionally upheld. Indeed, separation of powers exists not for efficiency’s sake but to guard against excessive concentrations of power by any branch. Bartkus v. People of State of Ill. , 359 U.S. 121, 137–38 (1959) (“[S]eparation of powers was adopted in the Constitution not to promote efficiency but to preclude the exercise of arbitrary power.”) (citation and quotations omitted).
[12] Even if the OPM Guidance (issued the same day as Exclusions ) could be construed as Treasury enforcing Exclusions against Chapter 73, it still does not pass muster under Saginaw County because there was no actual or threatened invasion to Treasury’s sovereign right to enforce .