VOTEVETS ACTION FUND, APPELLANT v. UNITED STATES DEPARTMENT OF VETERANS AFFAIRS AND DENIS MCDONOUGH, IN HIS OFFICIAL CAPACITY AS SECRETARY OF THE UNITED STATES DEPARTMENT OF VETERANS AFFAIRS, APPELLEES
No. 19-5337
United States Court of Appeals, FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 9, 2020 Decided March 30, 2021
Appeal from the United States District Court for the District of Columbia (No. 1:18-cv-01925)
Karianne M. Jones argued the cause for appellant. With her on the briefs were Benjamin M. Seel and Sean A. Lev.
Daniel Winik, Attorney, U.S. Department of Justice, argued the cause for appellee. With him on the brief was Mark B. Stern, Attorney.
Before: GARLAND*, PILLARD and WILKINS, Circuit Judges.
Opinion for the Court filed by Circuit Judge PILLARD.
The district court held that the Act did not apply to the so-called Mar-a-Lago Council and dismissed VoteVets’ complaint. Because we conclude that VoteVets plausibly alleges that the Council was a governmentally established or utilized advisory group within the meaning of the Act, we reverse.
BACKGROUND
A. The Federal Advisory Committee Act
Congress enacted the Federal Advisory Committee Act,
At the same time, “although its reach is extensive,” FACA does not “cover every formal and informal consultation between the President or an Executive agency and a group rendering advice.” Id. at 453. Executive officials’ solicitation of views from independently formed and operated entities—such as nonprofit organizations, associations, or political parties—with relevant insight and experience does not, without more, implicate the Act. Id. at 452-53. Nor does FACA apply to executive consultations on policy issues with ad hoc collections of private individuals who are not convened “to render advice or recommendations, as a group.” Ass‘n of Am. Physicians & Surgeons, Inc. v. Clinton, 997 F.2d 898, 913 (D.C. Cir. 1993).
Where it applies, FACA requires, among other things, that each covered advisory committee publicly file its charter,
B. VoteVets’ Allegations
VoteVets filed this suit in August 2018, claiming that the Mar-a-Lago Council was an advisory committee created to advise the Department of Veterans Affairs (VA or Department), that President Trump selected its members, that the President utilized the Council to inform and guide decisions
On December 28, 2016, President-elect Donald Trump attended a meeting with healthcare executives at the Mar-a-Lago resort in Palm Beach, Florida. Three men, all of whom are members of the Mar-a-Lago Club, organized the meeting: Isaac “Ike” Perlmutter, CEO of Marvel Entertainment; Bruce Moskowitz, a medical doctor and founder of the Biomedical Research and Education Foundation; and Marc Sherman, managing director of the consulting firm Alvarez & Marsal. Am. Compl. ¶¶ 2, 30-31. None of those men had experience in the U.S. military or government. Id. ¶ 2. According to the President-elect‘s spokesman, Sean Spicer, the meeting involved “lots of brainstorming on how to improve and reform” the Department. Id. ¶ 36(a).
A few weeks later, in January 2017, the President-elect announced at a press conference that his incoming administration would be setting up a group “to help David [Shulkin],” the nominee for Secretary of Veterans Affairs, “straighten out the [Department].” Id. ¶ 28; Defs.’ Mot. Dismiss, Ex. B at 3-4, VoteVets Action Fund v. Dep‘t of Veterans Affairs, 414 F. Supp. 3d 61 (D.D.C. 2019) (No. 18-cv-01925), ECF No. 8-3 (news conference transcript). He added that Ike Perlmutter was “very, very involved” in that effort. Am. Compl. ¶ 36(b). After the press conference, a source said that “Perlmutter would ‘take on an informal, though “significant,” advisory role in Trump‘s administration with respect to veterans’ affairs.‘” Id. VoteVets alleges that President Trump named Perlmutter “to lead the Council” and Moskowitz and Sherman to serve as members. Id. ¶ 29. No effort was made to ensure a balanced membership, nor to protect against inappropriate conflicts of interest.
The Mar-a-Lago Council reconvened on or around February 7, 2017, when Perlmutter, Moskowitz, and Sherman met with Shulkin. Id. ¶ 36(e); Appellant‘s Br. 7-8. After the meeting, Moskowitz sent an email to Shulkin with the subject line “Group meeting,” explaining that the group did “not need to meet in person monthly” but could have in-person meetings “when necessary” and collaborate by phone calls at other times. Am. Compl. ¶ 36(d). Over the ensuing year and a half, Perlmutter, Moskowitz, and Sherman conducted more than twenty-five meetings, id. ¶ 3, and advised the Department on a range of projects including an initiative to curb veteran suicide, id. ¶ 45, development of a mobile application for VA patients to locate services and records, id. ¶¶ 46-60, development of a national medical device registry, id. ¶¶ 61-63, a $10 billion contract to modernize the VA‘s digital records system, id. ¶¶ 9, 64-67, evaluation of VA surgery programs, id. ¶ 70, a potential partnership to develop a tracking system for human tissue devices, id. ¶ 71, privatization of essential VA healthcare services, id. ¶¶ 68-69, and development of a new VA mental health initiative, id. ¶ 72. None of the Council‘s meetings was publicly announced in advance or open to the public, and no minutes were kept or documents made public. Id. ¶¶ 76-77, 79, 83-85.
C. Prior Proceedings
Defendants moved to dismiss for lack of standing and failure to state a claim. The district court held that VoteVets had
On the question of establishment, the court held that President-elect Trump‘s “off-the-cuff comments” at a press conference “hardly reflect the kind of formal, affirmative steps required to establish an advisory committee.” Id. at 70. It also held that the facts “suggest[ed] that the three men—not President Trump or the Department—were the ones who took the initiative to organize themselves,” which the district court held undercut any reasonable inference that the President selected the members. Id.
As for the “utilized” inquiry, the court acknowledged that VoteVets had plausibly alleged “that the alleged advisory committee exercised influence . . . over the agency.” Id. at 72. But it held that “for FACA purposes, it is the amount of influence that the agency exercises over the advisory committee that matters.” Id. The court reasoned that if the Department of Veterans Affairs was itself under the Council‘s control, then the Department could not have exerted enough influence on the Council to “utilize” the latter under FACA. Id.
VoteVets timely appeals, arguing that its allegations plausibly demonstrate that the Council had the form of an advisory committee and was established or utilized by the federal government, so subject to the Act.
ANALYSIS
As an initial matter, we agree with the district court that VoteVets has standing to sue. VoteVets claims an informational injury under FACA by pleading that the Council and VA failed to comply with the statute‘s disclosure and transparency requirements. Id. at 67-68; see also Byrd v. EPA, 174 F.3d 239, 243 (D.C. Cir. 1999). And “[w]e assume, as we must at the pleading stage, that for purposes of standing the Council and its assorted subgroups are, as alleged, ‘advisory committees’ within the meaning of FACA § 3(2).” Judicial Watch, Inc. v. U.S. Dep‘t of Commerce, 583 F.3d 871, 873 (D.C. Cir. 2009). Even though the Council is no longer meeting, see Oral Arg. Tr. 8, this case presents a live controversy because VoteVets seeks documents from the Council pursuant to
We must decide whether the complaint plausibly alleges that the Council had the group structure of an advisory committee, and whether it was either established or utilized by the federal government. As already noted, FACA and its array of statutory requirements do not reach “every formal and informal consultation between the President or an Executive agency and a group rendering advice.” Pub. Citizen, 491 U.S. at 453. To count as an advisory committee, a group must have “in large measure, an organized structure, a fixed membership, and a specific purpose.” Ass‘n of Am. Physicians & Surgeons, 997 F.2d at 914. To be covered, such a committee must also be “established or utilized” by the federal government to provide “advice or recommendations for the President or one or more agencies or officers of the Federal Government.”
We review de novo the district court‘s grant of a motion to dismiss under
We analyze requisite aspects of the standard in turn to explain our holding that VoteVets plausibly alleged that the Council had the required structure and was, at a minimum, established by the federal government to advise the Department.
A. The Group‘s Structure, Membership, and Purpose
“In order to implicate FACA, the President, or his subordinates, must create an advisory group that has, in large measure, an organized structure, a fixed membership, and a specific purpose.” Ass‘n of Am. Physicians & Surgeons, 997 F.2d at 914. To be an advisory committee, the group must also “render advice or recommendations, as a group, and not as a collection of individuals.” Id. at 913. As described in VoteVets’ complaint, the Council met those requirements.
The three men identified as comprising the Council jointly organized the health care executives’ meeting with President-elect Trump at Mar-a-Lago in December 2016. Am. Compl. ¶¶ 2, 36(a). Trump announced the next month that a group led by Ike Perlmutter would help VA Secretary Shulkin “straighten out” the VA. Id. ¶¶ 28-29. The Council was to influence key VA personnel decisions and steer certain policy choices, including major decisions in areas of apparent personal or business interest to its members, such as private contracting for electronic medical records, electronic registries, or mobile apps. Id. ¶¶ 46-69.
After President Trump‘s inauguration, the Council met regularly and its members repeatedly described themselves as a “group” or “team” working together. Id. ¶ 74(b), (d); see also id. ¶ 74(o) (“we saw an opportunity to assist the Department of Veterans Affairs’ leadership,” “[w]e offered our counsel,” and “[w]e provided our advice and suggestions“). According to VoteVets, Perlmutter, Sherman, and Moskowitz worked intensively as a group, including through in-person meetings, emails, and phone calls. see Am. Compl.
As described in the complaint, the Mar-a-Lago Council also had the “formality and structure” that we have held is “an important factor in determining the presence of an advisory committee” under FACA. Ass‘n of Am. Physicians & Surgeons, 997 F.2d at 914. The Council had a “fixed membership” of Perlmutter, Moskowitz, and Sherman, Am. Compl. ¶¶ 2, 29, and “a specific purpose” of advising the Department of Veterans Affairs on “the essential decisions” relating to veterans’ affairs, id. ¶ 74(o). Perlmutter led the Council. Id. ¶ 29. Those allegations suffice to identify the trio as forming an advisory group for purposes of FACA. Additional detail is not required at the pleading stage.
B. The Government “Established” the Group
FACA defines the term “advisory committee” as “any committee, board, commission, council, conference, panel, task force, or other similar group” that is “established or utilized by the President,” “by one or more agencies,” or by a statute or reorganization plan.
Here, VoteVets’ allegations suffice to raise the inference that the federal government—either the Department of Veterans Affairs or President Trump himself—established the Council. As President-elect, Trump attended a meeting convened by
The Department urges us to draw different inferences from the above facts. It asserts that President-elect Trump‘s announcement evinced only a broad intention to seek input on veterans’ affairs from various parties, including healthcare executives and hospitals, not an intention to establish the particular three-member Council. Appellees’ Br. 13-14. As the Department reads it, the complaint does not identify an advisory committee convened by the President (or the Department), but describes only how Perlmutter, Moskowitz, and Sherman took it upon themselves to offer advice. Id. at 14-15. However plausible it might be that the President-elect‘s remarks at his January 2017 press conference referred to a different group of professionals, or that the members themselves formed the Council and were not selected by anyone in the federal government, the allegations plausibly support VoteVets’ claim that the President or other government officials formed the Council.
Nor is it dispositive that the President-elect mentioned only Perlmutter, not Sherman or Moskowitz, by name in his January 2017 press conference; VoteVets has alleged other facts, such as Sherman and Moskowitz‘s Mar-a-Lago connections to President Trump, and the President-elect‘s earlier meeting with all three men, that suggest that the President-elect selected each of them. See Am. Compl. ¶¶ 31, 36(a). The existence of a plausible alternative—even one that may “prove to be . . . true“—“does not relieve defendants of their obligation to respond to a complaint that states a plausible claim for relief, and to participate in discovery.” Banneker Ventures, 798 F.3d at 1129. Discovery may show that one of the government‘s alternate explanations is in fact correct. But it may also vindicate VoteVets’ theory, and “our role is not to speculate about which factual allegations are likely to be proved after discovery.” Harris v. D.C. Water & Sewer Auth., 791 F.3d 65, 70 (D.C. Cir. 2015).
Finally, the government need not take any formal steps to “establish” a FACA advisory committee. Appellees do not dispute that the role of the government in creating an advisory committee and selecting its members may be shown by circumstantial evidence. Where direct evidence such as a formal letter or express public announcement on the government‘s
No contrary implication should be drawn from our observation that “form is a factor” in assessing whether a group operates with the “organized structure, . . . fixed membership, and . . . specific purpose” required to qualify as an advisory committee at all. Ass‘n of Am. Physicians & Surgeons, 997 F.2d at 914 (“the formality and structure of the group” is “an important factor in determining the presence of an advisory committee“). Whether the working groups at issue in Association of American Physicians and Surgeons, Inc. had been “established” by the government was unquestioned. Id. at 903. The distinct, disputed issue that called for record development on remand in that case was whether those groups—admittedly established by the government “with a good deal of formality“—might nonetheless lack the structure required of a FACA advisory committee, operating instead more like a “crowd,” “horde,” or other “collection of individuals who do not significantly interact with each other.” Id. at 914-15. Formality was required on that issue, not on the separate question whether the government had “established” the group.
At the current stage, we accept that, shortly after the President-elect announced in January 2017 his intent to set up a group of healthcare business leaders to advise the Department of Veterans Affairs, such a group was established at governmental behest. See Appellant‘s Br. 36-37.
* * *
Because we hold that the complaint states a FACA claim based on the alleged advisory committee having been “established” by the President, possibly together with the agency, we need not also reach VoteVets’ alternative theory that the group was “utilized” by the government. We neither embrace nor reject the district court‘s holding that the government did not “utilize” the Council, and that ruling is now vacated in any event. We do not decide whether a committee that goes beyond working under the federal government‘s management or control, and instead controls the agency it advises, is “utilized” by the government within the meaning of FACA, and it appears that no other court has addressed the issue. Our holding that VoteVets has pleaded sufficient facts to survive a motion to dismiss allows the issues—whether the group was structured as an advisory committee within the meaning of FACA, and whether it was “established or utilized” by the government—to play themselves out in the district court through discovery and summary judgment or trial.
For the foregoing reasons, we reverse the district court‘s dismissal of VoteVets’ claims and remand for further proceedings consistent with this opinion.
So ordered.