SAN FRANCISCO (CN) – The Ninth Circuit did not indicate whether it would freeze a court-ordered block on $1 billion in funding the Trump administration allegedly misappropriated to build a wall on the U.S.- Mexico border, torpedoing arguments from both sides of the aisle at a hearing in San Francisco on Thursday.
The administration moved for an emergency stay of the order issued May 24 by U.S. District Judge Haywood Gilliam Jr. in Oakland. The preliminary injunction order barred it from spending $1 billion in Defense Department money on border wall projects in Arizona and Texas, and the administration contends the projects will be derailed unless the injunction is stayed pending appeal.
“I think the district court committed legal errors in assessing they would prevail on the merits,” Justice Department attorney James Burnham told the three-judge panel Thursday.
At issue is whether plaintiffs Sierra Club and Southern Borders Community Coalition can challenge the administration’s actions under Section 8005 of the Pentagon’s 2019 Appropriations Act. The provision states that a transfer for an “item” of funding must be “based on unforeseen military requirements” and cannot occur if “the item for which funds are requested has been denied by the Congress.”
The administration invoked Section 8005 to channel the $1 billion to the Department of Homeland Security for wall construction, arguing DHS’s February 2019 request to the Pentagon for counternarcotics funding was “unforeseen” when Congress authorized the Defense Department budget five months earlier. It also contends Congress never “denied” funding for the “item.”
The plaintiffs likewise invoked Section 8005 when they sued President Donald Trump in February to stop him from diverting $5.7 billion in federal funding to the wall. Trump had declared a national emergency on the border to access the money after Congress approved about $1.4 billion of the request for unrelated border projects.
In their suit and a related one brought by a 20-state coalition in the same court, the plaintiffs argue the wall funding was in fact foreseen and denied by Congress. The administration countered that the plaintiffs have no private right of action under the provision to bring their claims, and must instead challenge the transfer via the Administrative Procedure Act, which governs the way federal agencies establish new regulations.
Senior U.S. Circuit Judge N. Randy Smith appeared to accept this argument Thursday. The George W. Bush appointee said he wanted to send the plaintiffs’ claims back to Gilliam with orders to review them under the APA, which requires judges to defer to agency discretion.
“The district court did not give any deference to the agency who interpreted that statute,” Smith told plaintiffs’ attorney, Dror Ladin, of the American Civil Liberties Union. “Don’t I need to send that back?”
Smith implied the deference requirement would dispose of the claims. But Ladin said the plaintiffs can still seek an injunction against the administration for exceeding its statutory authority.
“We’re not asking for the court to jump to the constitutional questions; we’re saying the government is spending money it’s not authorized to spend,” said Ladin.
Senior U.S. Circuit Judge Richard Clifton, also a George W. Bush appointee, questioned why Congress left Section 8005 in the Appropriations Act when it knew Trump wanted to build a wall.
“It’s apparently been sitting there for years and it was included in the Appropriations Act even as there was concern the president was going to do what he wants anyway,” Clifton said. “So the opportunity was there and Congress did not exercise the opportunity.”
Ladin explained Trump’s actions had taken Congress by surprise.
“This is the first time in history where the government has submitted its 8005 reprogramming request to the committees, as it should, and said ‘we will disregard your judgment about this,'” Ladin said.
The three-judge panel similarly poked holes in arguments offered the Justice Department’s Burnham that the DHS request for money was “unforeseen.”
“How is this unforeseen when everyone is talking about building a wall for years? Everyone knew the president wanted to build this wall,” said U.S. Circuit Judge Michelle Friedland, an Obama appointee.
Clifton meanwhile expressed doubt about voting for a stay based on agency deference given that Congress had denied the appropriations request.
Burnham circled back to the APA, saying the plaintiffs won’t have standing under Section 8005 to pursue an injunction if the court deems the case an APA case.
“Which I don’t think anybody thinks the plaintiffs can satisfy,” he said.
The panel took the arguments under submission and did not indicate when it would rule.