WASHINGTON ALLIANCE OF TECHNOLOGY WORKERS, APPELLANT v. UNITED STATES DEPARTMENT OF HOMELAND SECURITY, ET AL., APPELLEES
No. 17-5110
United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 20, 2018 Decided June 8, 2018
Appeal from the United States District Court for the District of Columbia (No. 1:16-cv-01170)
John M. Miano argued the cause and filed briefs for the appellant. Dale L. Wilcox and Michael M. Hethmon entered appearances.
Scott G. Stewart, Attorney, United States Department of Justice, argued the cause for the appellees. Glenn M. Girdharry and Erez Reuveni, Assistant Directors, and Joshua S. Press, Trial Attorney, were with him on the brief.
Before: HENDERSON, Circuit Judge, and EDWARDS and GINSBURG, Senior Circuit Judges.
Opinion for the Court filed by Circuit Judge HENDERSON.
I. BACKGROUND
The Immigration and Nationality Act of 1952 (INA),
The Congress provided that “admission to the United States of any alien as a nonimmigrant shall be for such time and under such conditions as the” DHS Secretary1 “may by regulations prescribe.”
A. 1992 Regulation
In 1992, the DHS promulgated a regulation that established an “optional practical training” (OPT) program for a nonimmigrant admitted with an F-1 student visa. Pre-Completion Interval Training; F-1 Student Work Authorization, 57 Fed. Reg. 31954 (July 20, 1992) (1992 Rule). The regulation allowed a student to “apply . . . for authorization for temporary employment for [optional] practical training directly related to the student‘s major area of study.”
B. 2008 Regulation
In 2008, the DHS promulgated a regulation that authorized an F-1 student visa holder with a STEM degree who was participating in the OPT program to apply for an extension of OPT of up to seventeen months. Extending Period of Optional Practical Training by 17 Months for F-1 Nonimmigrant Students With STEM Degrees and Expanding Cap-Gap Relief for All F-1 Students With Pending H-1B Petitions, 73 Fed. Reg. 18944 (Apr. 8, 2008) (2008 Rule);
After Washtech I, the DHS issued a notice of proposed rulemaking with a request for comments. 80 Fed. Reg. 63376 (Oct. 19, 2015). After comments, the DHS issued its final rule. Improving and Expanding Training Opportunities for F-1 Nonimmigrant Students With STEM Degrees and Cap-Gap Relief for All Eligible F-1 Students, 81 Fed. Reg. 13040 (Mar. 11, 2016) (2016 Rule). The 2016 Rule authorizes an F-1 student visa holder with a STEM degree who is participating in the OPT program to “apply for an extension of OPT” of up to twenty-four months.
The 2016 Rule includes certain “safeguards” against “adverse [effects] on U.S. workers,” 81 Fed. Reg. at 13042: employers who want to participate in the program must attest, inter alia, that the OPT student “will not replace a full- or part-time, temporary or permanent U.S. worker,”
After the 2016 Rule was promulgated, we “vacate[d]” as “moot” the district court‘s decision invalidating the 2008 Rule “because the 2008 Rule is no longer in effect.” Wash. All. of Tech. Workers v. DHS (Washtech II), 650 F. App‘x 13, 14 (D.C. Cir. 2016).
D. Procedural History
In June 2016, Washtech filed a complaint challenging both the 1992 Rule and the 2016 Rule. Washtech brought four counts, alleging: (1) the 1992 Rule “exceeds” the DHS‘s statutory “authority“; (2) the 2016 Rule “is in excess of” the DHS‘s statutory “authority“; (3) the DHS committed three procedural violations in promulgating the 2016 Rule; and (4) the 2016 Rule “was implemented arbitrarily and capriciously.” Compl. ¶¶ 54–84.
The DHS moved to dismiss the complaint pursuant to
The district court granted the DHS‘s motion to dismiss. Wash. All. of Tech. Workers v. DHS (Washtech III), 249 F. Supp. 3d 524 (D.D.C. 2017). It dismissed Count I—the challenge to the 1992 Rule‘s statutory authority—on two alternative grounds. First, the district court held that Washtech “conceded” its lack of standing because it “fail[ed] to address the Government‘s argument that it lacks standing” in its opposition to the motion to dismiss. Id. at 536. Second, the district court held that Washtech in fact did not have standing. Id. at 536–37. The district court dismissed Count II—the challenge to the 2016 Rule‘s statutory authority—because Washtech “conceded” that it failed to state a claim for relief by “fail[ing] to address the Government‘s arguments” that Washtech insufficiently pleaded the claim in its opposition to the motion to dismiss. Id. at 555. The district court dismissed Count III on two alternative grounds. First, the district court held that Washtech conceded that it failed to state a claim for relief by not addressing the Government‘s arguments in its opposition to the motion to dismiss. Id. at 554. Second, the district court held that Washtech did not sufficiently plead a cause of action in Count III. Id. at 555. The district court dismissed Count IV for failure to state a claim for relief. Id. at 555–56. This appeal followed.
II. ANALYSIS
The “allegations of the complaint are generally taken as true for purposes of
We first address Washtech‘s standing. We conclude that Washtech had standing to bring Counts II, III and IV—all challenges to the 2016 Rule—under the doctrine of competitor standing. We do not decide whether Washtech had standing to bring Count I—the challenge to the 1992 Rule—because we affirm dismissal of Count I on the alternative jurisdictional ground of untimeliness. We then address the district court‘s dismissal of Counts II, III and IV. We reverse dismissal of Count II because we believe the district court abused its discretion in dismissing a plausible claim for relief based on Washtech‘s inadequate opposition to the DHS‘s motion to dismiss. On remand, the district court must consider whether the reopening doctrine applies to the issue raised in Count II. We affirm the district court‘s dismissal of Counts III and IV pursuant to
A. FRCP 12(b)(1) challenges
The DHS challenges Washtech‘s standing to bring all four counts. Washtech “must demonstrate standing for each claim [it] seeks to press.” DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 352 (2006). We address first Washtech‘s standing to bring Counts II, III and IV—its challenges to the 2016 OPT Rule. Washtech “must allege personal injury fairly traceable to the defendant‘s allegedly unlawful conduct and likely to be redressed by the requested relief.” Id. at 342 (internal quotation omitted). We believe Washtech has standing under the competitor standing doctrine.2 We address the three standing requirements in turn.
First, Washtech has suffered an injury in fact under the competitor standing doctrine. “The doctrine of competitor standing addresses the first requirement [of standing] by recognizing that economic actors suffer an injury in fact when agencies . . . allow increased competition against them.” Sherley v. Sebelius, 610 F.3d 69, 72 (D.C. Cir. 2010) (internal quotation and alterations omitted). Although “our cases addressing competitor standing have articulated various formulations of the standard for determining whether a plaintiff . . . has been injured,” the “basic requirement common to all our cases is that the complainant show an actual or imminent increase in competition, which increase we recognize will almost certainly cause an injury in fact.” Id. at 73.
As an initial matter, Washtech‘s complaint includes allegations that its members compete with F-1 student visa holders who are working in the OPT program pursuant to the DHS‘s regulations. The complaint alleges that three of Washtech‘s members have applied to companies for STEM jobs and that F-1 student visa holders who work at the same companies
The DHS argues that Washtech‘s members are not direct and current competitors of OPT workers because Washtech members have not “bothered to even apply” for STEM jobs since the 2016 Rule took effect. Appellees’ Br. 42. True enough, the complaint‘s allegations do not state that Washtech‘s members have applied after March 11, 2016, the date the DHS promulgated the 2016 Rule. But Mendoza forecloses the DHS‘s argument. In Mendoza, domestic herders challenged agency regulations that allegedly increased the number of foreign herders in the labor market. We held the plaintiffs suffered an injury in fact. 754 F.3d at 1011. Although the agency argued the plaintiffs were not competitors of foreign herders because the plaintiffs had not held a herding job for several years, we explained that domestic herders who “affirmed their desire to work” were “not removed from the herder labor market simply because they do not currently work as herders and have not filled out formal job applications.” Id. at 1013–14. Unlike in Mendoza, Washtech‘s complaint alleges that at least three of its members are currently employed on a full- or part-time basis in STEM positions, see Compl. ¶¶ 106–07, 137, 184–85, and that their job searches are “constant[],” id. ¶ 107, and “continuous,” id. ¶ 184. Washtech‘s members, then, are not removed from the STEM labor market simply because they have not filled out formal job applications since the 2016 Rule took effect. To the contrary, they have affirmed their desire to work.
Moreover, Washtech alleges that the 2016 Rule increased the labor supply in the STEM job market. See Compl. ¶ 108 (alleging that “[c]omputer programming is one of the degrees DHS targeted for increasing the labor supply under the 2016 Rule“). Although the DHS argues that Washtech‘s claim that the 2016 Rule has increased competition in the job market compared to pre-2016 levels is “imagin[ary],” Appellees’ Br. 42, Washtech may rely on “mere allegations” rather than “specific facts” to establish standing at the motion to dismiss stage, Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992). Additionally, Washtech‘s allegations of increased competition in the STEM labor market are supported by “facts found outside of the complaint,” which “we are permitted” to “consider . . . on a Rule 12(b)(1) motion to dismiss for lack of jurisdiction.” Mendoza, 754 F.3d at 1016 n.9; see White House Press Release, IMPACT REPORT: 100 Examples of President Obama‘s Leadership in Science, Technology, and Innovation (June 21, 2016) (“Approximately 34,000 individuals are participating in the STEM Optional Practical Training program at present, and with the[] improvements [of the 2016 Rule] the total may expand to nearly 50,000 in the first year and grow to approximately 92,000 by the tenth year of implementation.“), https://obamawhitehouse.archives.gov/the-press-office/2016/06/21/impact-report-100-examples-president-obamas-leadership-science.
Second, Washtech‘s injury is caused by the 2016 Rule. The increase in competition is directly traceable to the DHS because the DHS‘s regulations authorize work for the OPT participants with whom Washtech members compete for jobs. See Honeywell Int‘l Inc. v. EPA, 374 F.3d 1363, 1369 (D.C. Cir. 2004) (per curiam) (agency regulation that “legalizes the entry of a product into a market in which [plaintiff] competes” causes plaintiff injury), withdrawn in part on other grounds, 393 F.3d 1315 (D.C. Cir. 2005) (per curiam). The DHS argues that Washtech‘s injury is not caused by the DHS because employers in the STEM labor market independently decide whether Washtech members are hired. We have heretofore rejected this line of reasoning as “inconsistent with the competitor standing doctrine.” Bristol-Myers Squibb Co. v. Shalala, 91 F.3d 1493, 1499 (D.C. Cir. 1996). In Bristol-Myers, the manufacturer of a pioneer drug challenged an agency regulation authorizing the manufacture of generic versions of the same drug. Id. at 1495–97. After concluding that the increase in competing products in the market was a sufficient injury in fact, we held the challenged regulation caused the injury. Id. at 1499. Because “the injury claimed is exposure to competition” rather than “lost sales, per se,” it was “no answer to say that the FDA is merely permitting a competitive product to enter the market and leaving the purchasing decision to the consumer.” Id. The same rationale obtains here. The injury claimed is exposure to increased competition in the STEM labor market—not lost jobs, per se. Accordingly, the DHS‘s argument that its regulation leaves the hiring decision to the employer is unavailing. See also Honeywell Int‘l, 374 F.3d at 1369 (rejecting argument that plaintiff‘s injury was not caused by regulation allowing competing products into market because plaintiff could only “speculat[e] about the purchasing decisions of third parties not before the court“). Washtech has therefore “demonstrate[d] a causal relationship between the final agency action and the alleged injur[y].” Ctr. for Law & Educ. v. Dep‘t of Educ., 396 F.3d 1152, 1160 (D.C. Cir. 2005).
Third, and finally, Washtech‘s injury is redressable by a favorable decision. Washtech has alleged that it is injured because of increased competition from workers who are eligible to work only because of the 2016 Rule. A court order invalidating the 2016 Rule would eliminate workers from the STEM job market and therefore decrease competition for the STEM jobs pursued by Washtech‘s members. The specific injury suffered, then, would be remedied by a favorable court order. See Sherley, 610 F.3d at 72 (stem-cell
Washtech‘s standing to bring Count I, a claim that the 1992 Rule exceeds the DHS‘s statutory authority, is less certain. Washtech argues that the 1992 Rule caused the same injury as the 2016 Rule—an increase in competition for STEM jobs as a result of the Rule‘s permitting OPT workers in the STEM field—but Washtech‘s complaint provides less substance regarding the 1992 Rule. The complaint alleges that Washtech members compete with workers operating under the extensions authorized by the 2016 Rule but does not specifically allege that they compete with workers operating under the initial twelve-month OPT period authorized by the 1992 Rule. The DHS urges us to agree with the district court that Washtech‘s failure is fatal to its standing to challenge the 1992 Rule. We are skeptical of the DHS‘s argument. No OPT participants could apply for extensions to work without first working for twelve months as authorized by the 1992 Rule. The allegations regarding the 2016 Rule naturally and inevitably encompass allegations against the 1992 Rule, even if not explicitly spelled out that way in the complaint. Nevertheless, we need not decide this issue because there is another jurisdictional bar.3
We affirm dismissal of Count I on the alternative ground that the claim is untimely. Under
The 1992 Rule was unquestionably final agency action. Therefore, the six-year window to directly challenge the statutory authority of the 1992 Rule closed in 1998. As discussed infra, however, the dismissal of Count I does not foreclose Washtech‘s challenge to the statutory authority of the OPT program as a whole because the 2016 Rule may have reopened the issue anew.
B. FRCP 12(b)(6) and Local Rule 7(b) challenges
We now turn to Washtech‘s claims attacking the 2016 Rule. The DHS asserts that all three of the remaining counts, II, III and IV, fail to state a claim
The DHS also asserts that we should affirm the district court‘s decision to treat two of the remaining counts—II and III—as “conceded” pursuant to the United States District Court for the District of Columbia‘s Local Rule 7(b), which provides:
Within 14 days of the date of service [of a party‘s motion] or at such other time as the Court may direct, an opposing party shall serve and file a memorandum of points and authorities in opposition to the motion. If such a memorandum is not filed within the prescribed time, the Court may treat the motion as conceded.
D.D.C. LOCAL RULE 7(b).
1. Count II
Count II alleges that the “2016 Rule is in excess of DHS[‘s] authority” because the DHS‘s “policy of allowing aliens to remain in the United States after completion of the course of study to work or be unemployed is in excess of DHS authority to admit academic students under
The DHS argues this is not enough to state a plausible claim for relief. It asserts Washtech needs to “explain[]” how the regulation exceeds the DHS‘s statutory authority. Appellees’ Br. 51. But we are hard-pressed to imagine what more Washtech needs to allege to satisfy the “lesser showing required at the pleading stage,” Am. Soc‘y for Prevention of Cruelty to Animals v. Feld Entm‘t, Inc., 659 F.3d 13, 18 (D.C. Cir. 2011), particularly in light of the kind of claim it brings. A claim that a regulation exceeds statutory authority is not a claim that requires factual allegations about the defendant‘s actions in order to demonstrate lack of authority. Compare Mountain States Legal Found. v. Bush, 306 F.3d 1132, 1136–37 (D.C. Cir. 2002) (dismissing complaint alleging simply “President acted unconstitutionally and ultra vires under the Property Clause” because plaintiff “fail[ed] to allege any facts sufficient to support its ultra vires claim”
Despite the fact that Washtech stated a plausible claim for relief, the district court concluded that Washtech‘s response in opposition to the motion to dismiss was inadequate. The district court thus “deem[ed]” it “appropriate” to treat the issue as “conceded” and dismissed Count II pursuant to Local Rule 7(b). Washtech III, 249 F. Supp. 3d at 555. We review “the district court‘s application of [Local Rule] 7(b) for abuse of discretion.” Fox, 389 F.3d at 1294. We think the district court‘s decision to dismiss Washtech‘s plausible claim for relief because its timely response to the motion to dismiss purportedly failed to state Washtech‘s opposition with sufficient substance—notwithstanding Washtech‘s response in fact disagreed with the DHS‘s contention that it failed to state a plausible claim for relief and also included a citation to the allegedly deficient complaint—was an abuse of discretion.
The circumstances here are distinguishable from our precedent affirming the application of Local Rule 7(b). We have endorsed dismissing a complaint pursuant to Local Rule 7(b) if the plaintiff failed to timely file a response in opposition to the defendant‘s
In the context of non-dispositive motions, we have affirmed district court decisions that treated as conceded an issue left entirely unaddressed by the plaintiff in a timely filed response. See Texas v. United States, 798 F.3d 1108, 1110, 1113–16 (D.C. Cir. 2015) (affirming grant of defendant‘s motion seeking attorneys’ fees when plaintiffs response did not dispute assertion that defendant was “prevailing party” within meaning of statute); Wannall v. Honeywell, Inc., 775 F.3d 425, 428–29 (D.C. Cir. 2014) (affirming grant of defendant‘s motion to strike untimely declaration because plaintiff “did not raise the argument” that
Granted, Washtech would have been wise to more fully develop its argument that it met
We conclude that a party may rest on its complaint in the face of a motion to dismiss if the complaint itself adequately states a plausible claim for relief. The district court decision turned what should be an attack on the legal sufficiency of the complaint into an attack on the legal sufficiency of the response in opposition to the motion to dismiss. That transformation undermines “the clear preference of the Federal Rules to resolve disputes on their merits.” Cohen, 819 F.3d at 482. Although Local Rule 7(b) “is a docket-management tool that facilitates efficient and effective resolution of motions by requiring the prompt joining of issues,” Fox, 389 F.3d at 1294, it is not a tool to subvert the
That said, whether Count II may proceed remains in question. Count II as framed alleges that the entire OPT program is ultra vires. See Compl. ¶¶ 62–63. The challenge to the DHS‘s authority to provide for OPT workers at all implicates the authority first granted by the 1992 Rule. As discussed supra, the six-year statute of limitations on such a challenge closed in 1998. Washtech asserts, however, that it may still challenge the statutory authority for the entire OPT program under the reopening doctrine. The “doctrine arises where an agency conducts a rulemaking or adopts a policy on an issue at one time, and then in a later rulemaking restates the
policy or otherwise addresses the issue again without altering the original decision.” CTIA-Wireless Ass‘n v. FCC, 466 F.3d 105, 110 (D.C. Cir. 2006) (internal quotation and alterations omitted).
The district court did not decide whether Washtech‘s challenge to the OPT program‘s statutory authority was reviewable under the reopening doctrine. See Washtech III, 249 F. Supp. 3d at 537 n.3. We therefore decline to address the question in the first instance and leave it for the district court to address on remand. See Singleton v. Wulff, 428 U.S. 106, 120 (1976) (stating “general rule ... that a federal appellate court does not consider an issue not passed upon below“); Liberty Prop. Trust v. Republic Props. Corp., 577 F.3d 335, 341 (D.C. Cir. 2009) (“Although we . . . have the discretion to consider questions of law that were not passed upon by the District Court, this court‘s normal rule is to avoid such consideration.” (internal quotation and alterations omitted)).
2. Count III
Washtech‘s third claim alleges three procedural deficiencies in the DHS‘s promulgation of the 2016 Rule: (1) failure to comply with the Congressional Review Act; (2) failure to provide “actual” notice and comment; and (3) failure to comply with incorporation-by-reference requirements. The complaint does not state a plausible claim for relief based on any of the three purported procedural violations. We therefore affirm the district court‘s dismissal pursuant to
First, Washtech alleged that the 2016 Rule was published in the Federal Register fewer than 60 days before it took effect, contrary to the Congressional Review Act‘s mandatory 60-day delay. Compl. ¶¶ 64–66 (citing
Second, Washtech alleged that the DHS “failed to subject the question of whether the OPT program should be expanded beyond a year to actual notice and comment.” Compl. ¶ 67. In addition to the fact that the DHS did in fact subject the question to notice and comment, see 80
Third, Washtech alleged that the provision of the OPT 2016 Rule that the Secretary is to “maintain” a “complete list of qualifying [STEM] degree program categories” to be published on the “Student and Exchange Visitor Program Web site,”
3. Count IV
Washtech‘s fourth and final claim alleges that the 2016 Rule is arbitrary and capricious because it “requires employers to provide foreign-guest workers OPT mentoring without requiring that such program be provided to American workers” and because it “singles out STEM occupations for an increase in foreign labor through longer work periods with no justification.” Compl. ¶¶ 81–84.
Neither allegation “permit[s] the court to infer more than the mere possibility of misconduct.” Iqbal, 556 U.S. at 679. The complaint‘s allegation that the Rule deals with two different things—OPT workers and American workers—in two different ways—the former group receives mentoring programs but the latter does not—does not state a plausible claim that the regulation is arbitrary and capricious. Washtech‘s desire for its own members to participate in mentoring programs does not sufficiently allege illegality on the DHS‘s part. Cf. Twombly, 550 U.S. at 555–57 (pleading defendant‘s “parallel conduct” in antitrust case insufficient even though parallel conduct could indicate intent to conspire because, without more, alleging “parallel conduct” placed defendant in “neutral territory“). Further, the complaint‘s allegation that Washtech arbitrarily increased foreign labor in the STEM market with no justification for not doing so in other fields is unsupported by any factual allegations. Washtech has set forth no more than an insufficient “defendant-unlawfully-harmed-me accusation.” Iqbal, 556 U.S. at 678; see also L. Xia v. Tillerson, 865 F.3d 643, 660 (D.C. Cir. 2017) (“conclusory allegation” of unlawfulness insufficient to survive
So ordered.