Case Information
*1 United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 17, 2016 Decided April 22, 2016
No. 15-5065 V ICTOR K. W ILLIAMS , A PPELLANT v.
J ACOB J. L EW , IN HIS OFFICIAL CAPACITY AS S ECRETARY OF
THE U.S. T REASURY D EPARTMENT AND U NITED S TATES D EPARTMENT OF THE T REASURY ,
A PPELLEES Appeal from the United States District Court for the District of Columbia (No. 1:14-cv-00183) Justin G. Florence argued the cause for appellant. On the briefs was Victor Williams , pro se. Douglas Hallward- Driemeier , Edward F. Roche , and Jonathan Ference-Burke entered appearances.
Molly R. Silfen , Attorney, U.S. Department of Justice, argued the cause for appellees. With her on the brief were Benjamin C. Mizer , Principal Deputy Assistant Attorney General, and Mark B. Stern , Attorney.
Before: T ATEL and G RIFFITH , Circuit Judges , and S ENTELLE , Senior Circuit Judge .
Opinion for the Court filed by Senior Circuit Judge S ENTELLE .
S ENTELLE , Senior Circuit Judge : Appellant Victor Williams, as a holder of U.S. public debt, challenges the constitutionality of the Debt Limit Statute, 31 U.S.C. § 3101. Williams alleges on appeal violations of the Fourteenth Amendment Public Debt Clause, U.S. Const. amend. XIV, § 4, and the Fifth Amendment Due Process Clause, U.S. Const. amend. V. He seeks relief declaring the Debt Limit Statute unconstitutional and enjoining the Secretary from enforcing the statute. Because Williams fails to allege plausible factual allegations to establish the constitutional minimum requirements for Article III standing, either in the first amended complaint filed with the district court or in his proposed amended complaint filed with this Court under 28 U.S.C. § 1653, we affirm the decision of the district court dismissing Williams’s claims for lack of standing. We also affirm the district court’s order denying Williams’s motion to amend his first amended complaint and deny Williams’s motion to amend his complaint on appeal.
I. BACKGROUND
This case is an outgrowth of the continuing debate surrounding the statutory limit on U.S. debt. The Debt Limit Statute, 31 U.S.C. § 3101(b), imposes an upper limit on “[t]he face amount of obligations issued under this chapter and the face amount of obligations whose principal and interest are guaranteed by the United States Government.” The United States first instituted a ceiling on the federal debt in 1917 to accompany the United States’ entrance into World War I. See *3 D. Andrew Austin, Cong. Research Serv., The Debt Limit: History and Recent Increases 2-3 (2008), http://fpc.state.gov/ documents/organization/105193.pdf; see also Act of Sept. 24, 1917, Pub. L. No. 65-43, 40 Stat. 288 (codified as amended at 31 U.S.C. § 3101). The original purpose of the Debt Limit Statute was to increase the Treasury Department’s flexibility to manage the government’s financial obligations. See Austin, supra , at 3; see also Josh Hazan, Unconstitutional Debt Ceilings , 103 Geo. L.J. Online 29, 30-32 (2014). Yet both in 2011 and in 2013, congressional budgeting disputes threatened default on U.S. obligations as outstanding debt broached the debt ceiling. See Hazan, supra , at 29-30. Following the 2011 impasse, “U.S. government debt was downgraded, the stock market fell, measures of volatility jumped, and credit risk spreads widened noticeably . . . .” U.S. Dep’t of the Treasury, The Potential Macroeconomic Effect of Debt Ceiling Brinksmanship 1 (2013), https:// www.treasury.gov/connect/blog/Pages/Report-on- Macroeconomic-Effect-of-Debt-Ceiling- Brinkmanship.aspx. Likewise, the 2013 dispute “further eroded confidence in the United States government, and wounded the already fragile economy.” Chad DeVeaux, The Fourth Zone of Presidential Power: Analyzing the Debt- Ceiling Standoffs Through the Prism of Youngstown Steel , 47 Conn. L. Rev. 395, 407 (2014). In the wake of these political impasses, Congress presently has suspended the Debt Limit Statute through March 15, 2017. See Bipartisan Budget Act of 2015, Pub. L. No. 114-74, § 901(a), 129 Stat. 584, 620.
Williams holds various Treasury-issued public debt instruments, including “savings bonds and Treasury bills, notes, bonds, and TIPS [Treasury Inflation Indexed Securities] of various durations (4-weeks, 13-weeks, 26- weeks, 52-week[s], 3-years, 5-years, 7-years, [and] 30- years).” J.A. 20 ¶ 39. Seeking a judicial solution to what he *4 views as the perpetual “political conflict regarding the inevitable need to raise the debt limit,” J.A. 6 ¶ 2, on February 7, 2014, Williams filed suit, challenging the constitutionality of the Debt Limit Statute, against the U.S. Department of the Treasury and the Secretary of the U.S. Treasury (collectively, the “Treasury Department”). Before the Treasury Department lodged a responsive pleading or Rule 12(b) motion, Williams filed a first amended complaint as-of-right on March 5, 2014. Cf. Fed. R. Civ. P. 15(a)(1). The first amended complaint sought a judgment declaring the Debt Limit Statute unconstitutional and a permanent injunction prohibiting the Treasury Department from “relying upon, invoking, or enforcing” the statute. J.A. 34.
Williams asserted three alleged constitutional infirmities in the Debt Limit Statute before the district court. First, he claimed that the statute violates the Public Debt Clause, U.S. Const. amend. XIV, § 4, which states, in relevant part:
The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.
See J.A. 21 ¶ 42(A); see also Amended Complaint Filed on Appeal Pursuant to 28 U.S.C. 1653 ¶¶ 65(A), 66, Williams v. Lew , No. 15-5065 (D.C. Cir. May 14, 2015) [hereinafter Pr. Am. Compl.]. Second, Williams alleged a violation of the Fifth Amendment’s Due Process Clause based on the Treasury Department’s “arbitrary enforcement” of the Debt Limit Statute. J.A. 21 ¶ 42(A); see also Pr. Am. Compl. ¶¶ 65(A), 66. Finally, Williams made a separation-of-powers *5 argument that the Debt Limit Statute “prevent[s] the Executive from carrying out sworn Article II § 3 duties to ‘take Care that the Laws be faithfully executed.’” J.A. 21 ¶ 42(B); see also Pr. Am. Compl. ¶ 65(B).
The Treasury Department moved to dismiss Williams’s first amended complaint under Rule 12(b)(1) for lack of standing. Williams then moved under Rule 15(a)(2) for leave to file a second amended complaint, in part “to clarify his claims [and to] further explain and develop the basis for his standing . . . .” J.A. 96. The district court denied Williams’s motion to amend without explanation via minute order on May 18, 2014. On January 6, 2015, the district court granted the Treasury Department’s motion to dismiss, concluding that Williams lacked standing to pursue his claims in federal court. Williams now appeals from the district court’s denial of his motion to amend and from the order dismissing his claims for lack of standing. Williams also moves this Court for leave to amend his complaint under 28 U.S.C. § 1653. Request To Allow Filing of an Amended Complaint & Alternative Motion To Vacate, Reverse, & Remand, Williams v. Lew , No. 15- 5065 (D.C. Cir. May 1, 2015). We have jurisdiction pursuant to 28 U.S.C. § 1291.
II. ANALYSIS
Williams makes only a fleeting reference in his opening
brief, within a section ostensibly discussing his Public Debt
Clause claim,
to his separation-of-powers argument.
Appellant’s Br. 15-16 (stating that the debt limit “traps the
Executive in an arbitrary ‘trilemna’ [sic] . . . [which] works a
structural constitutional violation”). Because he fails to
develop that argument, or his standing to assert it, Williams
has therefore forfeited the claim.
See Abdullah v. Obama
,
A. A NY E RROR IN THE D ENIAL OF W ILLIAMS ’ S
M OTION T O A MEND W AS H ARMLESS
Under Fed. R. Civ. P. 15(a)(2), when unable to do so as-
of-right, “a party may amend its pleading only with the
opposing party’s written consent or the court’s leave. The
court should freely give leave when justice so requires.” We
review a district court’s denial of a motion to amend a
complaint for abuse of discretion.
See Sierra Club v. U.S.
Army Corps of Engineers
,
Governing law permits litigants to amend their pleadings “in . . . appellate courts” to cure “[d]efective allegations of jurisdiction . . . .” 28 U.S.C. § 1653. As noted above, Williams filed both a § 1653 motion and an amended *7 complaint (the “Proposed Amended Complaint”) with this Court. “Courts may deny a motion to amend a complaint as futile . . . if the proposed claim would not survive a motion to dismiss.” James Madison Ltd. by Hecht v. Ludwig , 82 F.3d 1085, 1099 (D.C. Cir. 1996). Accordingly, because we hold that Williams’s Proposed Amended Complaint fails to state a plausible basis for standing, we deny the pending § 1653 motion as futile and affirm the district court’s minute order. See 28 U.S.C. § 2111 (Appellate courts must disregard “errors or defects which do not affect the substantial rights of the parties.”).
B. W ILLIAMS L ACKS A RTICLE III S TANDING
1. Standard of Review
We review the district court’s standing determinations de
novo.
See Food & Water Watch, Inc. v. Vilsack
, 808 F.3d
905, 913 (D.C. Cir. 2015). “To survive a motion to dismiss
for lack of standing, a complaint must state a plausible claim
that the plaintiff has suffered an injury in fact fairly traceable
to the actions of the defendant that is likely to be redressed by
a favorable decision on the merits.”
Humane Soc’y v. Vilsack
,
2. Williams Does Not Allege a Cognizable
Injury-In-Fact
The operative complaint before the district court was
Williams’s first amended complaint.
See
J.A. 2. This
complaint clearly fails to allege a plausible basis for standing.
Williams asserts only that he holds United States public debt
and “avers direct, individual, concrete, and certainly
impending harm from the unconstitutional debt ceiling
statute.” J.A. 20 ¶ 39;
cf. id.
at 5-6 ¶ 1 (noting the “threat[]
[of] Defendants’ arbitrary default on Plaintiff’s securities”);
id.
at 27 ¶ 50 (alleging “concrete and certainly impending
harm”). Because such conclusory statements and legal
conclusions are insufficient to state a plausible basis for
standing,
Iqbal
, 556 U.S. at 663, Williams can only avoid
dismissal if the Proposed Amended Complaint accompanying
his § 1653 motion with this Court cures the defect,
see James
Madison Ltd. by Hecht
,
In that complaint, Williams alleges past, current, and future harms from the Debt Limit Statute to his public debt holdings. Specifically, Williams discusses how the market devalued public debt as a result of the 2013 “default crisis,” including, for example, how “[o]n October 15, 2013, interest rates on commercial interbank loans were lower than interest rates on Treasury bills.” Pr. Am. Compl. ¶¶ 30-35. As to current harms, Williams claims that the Debt Limit Statute degrades the low-risk profile of his investments and devalues those investments. Id. ¶¶ 2, 21, 30, 41, 44. Such harms supposedly worsen when the Treasury Department resorts to “extraordinary measures” following breach of the debt ceiling. Id. ¶¶ 4, 45. Williams also alleges that he suffered and continues to suffer noneconomic harms in the form of “increasing[] worry and concern” about his public debt *9 investments. Id. ¶¶ 2, 21. Finally, Williams avers to “certainly-impending” future economic and noneconomic harms from the full enforcement of the Debt Limit Statute— i.e., an actual default on United States debts. Id. ¶¶ 4, 45, 50.
Williams’s allegations of past injury are irrelevant to the
standing inquiry in this case. We stated in
Arpaio v. Obama
that, where a plaintiff “seeks prospective declaratory and
injunctive relief, he must establish an ongoing or future injury
that is ‘certainly impending’; he may not rest on past injury.”
Unfortunately for Williams, his claims of future injuries
are entirely conjectural. It is indisputable that the United
States has never defaulted on its debt obligations.
See
Williams v. Lew
,
Thus, in order to satisfy Article III’s standing requirements, Williams must put forth plausible allegations of current and ongoing injuries. An analysis of the Proposed Amended Complaint shows that Williams fails to meet this standard. The crux of Williams’s argument is that the Debt Limit Statute degrades the risk profile of his public debt holdings and devalues those investments. To support this position, Williams cites in his briefs, but not in the complaint, a July 2015 report from the Government Accountability Office (“GAO”) discussing the market effects of “debt limit impasses.” See U.S. Gov’t Accountability Office, DEBT LIMIT: Market Response to Recent Impasses Underscores Need To Consider Alternative Approaches (2015) [hereinafter GAO Report], http://www.gao.gov/assets/680/671286.pdf. The GAO Report admittedly details numerous effects that the 2011 and 2013 debt limit impasses had on U.S. financial markets. For example, investors avoided “at-risk” Treasury securities; interest rates on “at-risk” securities rose; the liquidity of “at-risk” securities declined; investors substituted “at-risk” Treasury securities for other investments; and investors refused to accept “at-risk” Treasury securities as collateral. Id. at 12-28.
The Court may take judicial notice of the GAO Report. See Fed. R. Evid. 201(b); see also Farah v. Esquire Magazine , 736 F.3d 528, 534 (D.C. Cir. 2013) (“And, [i]n determining whether a complaint states a claim, the court may consider the facts alleged in the complaint, documents attached thereto or incorporated therein, and matters of which it may take judicial notice.” (alteration in original) (citation and internal quotation marks omitted)). However, the GAO Report does not make Williams’s alleged current injuries plausible. To the contrary, the report suggests that prior debt limit impasses only affected “at-risk” Treasury securities, i.e., holdings with payments due during the impasse . See, e.g. , GAO Report 13 (“Market participants said that investors were primarily concerned with shorter-term Treasury bills that were maturing during this time [late-October through mid- November 2013].”); U.S. Gov’t Accountability Office, GAO Highlights: Highlights of GAO-15-476, A Report to the Congress 1 (2015), http://www.gao.gov/assets/680/ 671287.pdf (“During the 2013 debt limit impasse, investors reported taking the unprecedented action of systematically avoiding certain Treasury securities—those that matured around the dates when the [Treasury Department] projected it would exhaust . . . extraordinary measures . . . .”). Williams’s current investment holdings are not “at-risk.” As the Treasury Department states, the Debt Limit Statute is suspended until March 15, 2017. See Bipartisan Budget Act of 2015, Pub. L. No. 114-74, § 901(a). Any effect that the Debt Limit Statute’s specter may have on Williams’s current public debt holdings is therefore speculative and made no less so by the allegations in the Proposed Amended Complaint. See Lujan , 504 U.S. at 560 (injury-in-fact cannot be “conjectural” or “hypothetical”). Nor is it clear that Williams’s securities will become “at-risk” in the future. Because Congress has suspended the Debt Limit Statute, Williams must rely on rote *12 conjecture that another debt limit impasse will occur once the suspension ends. See id.
Furthermore, Williams’s alleged noneconomic injuries do not provide a plausible basis for standing. For the reasons stated above, any current harm to Williams’s investments is speculative, and he fails to allege future harms that are certainly impending. The Court cannot exercise jurisdiction based on “worr[ies] and concern[s]” that lack a reasoned basis. Pr. Am. Compl. ¶ 2; see Clapper , 133 S. Ct. at 1151 (“[R]espondents cannot manufacture standing merely by inflicting harm on themselves based on their fears of hypothetical future harm that is not certainly impending.”).
3. Williams Separately Lacks Standing To
Pursue His Due Process Claims
Williams asserts a Fifth Amendment due process
violation based on the Treasury Department’s “arbitrary”
enforcement of the Debt Limit Statute. Pr. Am. Compl. ¶¶ 5,
11, 21, 46. In particular, Williams alleges that the Treasury
Department cannot prioritize payments to holders of public
debt in the event of default,
id.
¶ 5, and it “has no rational
method to protect Treasury bondholders, insure Certificate of
Indebtedness liquidity, or honor promises to repay the TSP G
Fund in the certain event of default,”
id.
¶ 46. This claim
turns entirely on hypothetical future injury from the arbitrary
prioritization of Treasury funds and therefore fails plausibly
to allege a cognizable injury-in-fact.
Lujan
,
4. The Court Need Not Reach the Treasury Department’s Remaining Arguments The Treasury Department also argues that we should dismiss Williams’s claims as “generalized grievances” that “do not state an Article III case or controversy.” Lujan , 504 U.S. at 574. We need not parse the line between a “generalized grievance” and a “concrete, though widely shared” injury-in-fact. FEC v. Akins , 524 U.S. 11, 23-24 (1998). Williams fails to allege plausible facts to establish the “irreducible constitutional minimum of standing,” Lujan , 504 U.S. at 560, thereby obviating the generalized grievance issue. For the same reason, we find it unnecessary to revisit our prior cases discussing the availability, or lack thereof, of “bondholder standing.” See Reuss v. Balles , 584 F.2d 461, 469-70 n.29 (D.C. Cir. 1978); cf. Riegle v. FOMC , 656 F.2d 873, 876 (D.C. Cir. 1981); Comm. for Monetary Reform v. Bd. of Govs. of Fed. Reserve Sys. , 766 F.2d 538, 540 (D.C. Cir. 1985).
We therefore affirm the district court’s dismissal of Williams’s claims for lack of standing.
C. W ILLIAMS ’ S F ACIAL C HALLENGE TO THE D EBT L IMIT S TATUTE D OES N OT P ROVIDE AN I NDEPENDENT B ASIS FOR S TANDING In the alternative, Williams cryptically alleges that his facial challenge to the Debt Limit Statute is sufficient to confer Article III standing. Williams’s argument is itself facially suspect, and it is also unavailing under the Supreme Court’s and our case law.
As the Supreme Court stated explicitly in
Lujan
, the three
elements of standing—i.e., injury-in-fact, traceability, and
*14
redressability—encompass “the irreducible constitutional
minimum” under Article III. 504 U.S. at 560. Absent any
one of these requirements, federal courts lack jurisdiction to
adjudicate a plaintiff’s claims. As the Court stated in
Bond v.
United States
,
Because, as demonstrated above, Williams fails to allege
plausible facts to establish the “irreducible constitutional
minimum” requirements for Article III standing under
Lujan
,
We recognize that the contours of Article III standing
with respect to facial constitutional challenges may be
imprecise.
Compare Los Angeles Police Dep’t v. United
Reporting Pub. Corp.
,
But we know of no case stating that a facial challenge to the constitutionality of a statute itself suffices to establish standing, nor do we adopt such a holding. Unless there is an actual Article III “Case[]” or “Controvers[y]” before us, we lack jurisdiction. See U.S. Const. art. III, § 2, cl. 1; Lujan , 504 U.S. at 559-60; Grocery Mfrs. Ass’n v. EPA , 693 F.3d 169, 174 (D.C. Cir. 2012) (“The application of the standing doctrine . . . ensures that federal courts act only within their constitutionally prescribed role: resolving ‘Cases’ and ‘Controversies,’ those disputes which are appropriately resolved through the judicial process.” (citations and internal quotation marks omitted)). Because Williams does not make this constitutionally mandated showing, we therefore affirm the district court’s dismissal of his claim that the Debt Limit Statute is facially unconstitutional.
III. CONCLUSION
We express no opinion on the merits of Williams’s constitutional claims. For the reasons stated herein, the Court affirms both the district court’s order denying Williams’s motion to amend his complaint and the order dismissing Williams’s claims for lack of standing. Williams’s motion under 28 U.S.C. § 1653 to amend his complaint on appeal is accordingly denied.
So ordered.