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STUART F. DELERY Acting Assistant Attorney General

ANDRE BIROTTE JR. United States Attorney LEON W. WEIDMAN Chief, Civil Division ALARICE M. MEDRANO (SBN 166730) Assistant United States Attorney Room 7516 Federal Building 300 North Los Angeles Street Los Angeles, CA 90012 Telephone: (213) 894-0460 Facsimile: (213) 894-7819 E-mail: Alarice.Medrano@usdoj.gov Attorneys for Defendants

JUDRY L. SUBAR Assistant Branch Director ELISABETH LAYTON Senior Counsel KAREN S. BLOOM Trial Attorney U.S. Department of Justice Civil Division Federal Programs Branch 20 Massachusetts Ave., N.W. Washington, DC 20001 T: (202) 514-3183;F: (202) 616-8470 Email: Elisabeth.Layton@usdoj.gov

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

GREGORY VALENTINI, et al., Plaintiffs, vs. ERIC SHINSEKI, et al., Defendants.

) ) ) ) ) ) ) ) ) )

Case No.: 11-CV-04846 SJO (MRW) DEFENDANTS MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO PLAINTIFFS MOTION FOR SUMMARY JUDGMENT [NO HEARING DATE SET] [Before the Honorable S. James Otero]

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TABLE OF CONTENTS

INTRODUCTION ..................................................................................................... 1 ARGUMENT ............................................................................................................. 2 I. II. The APA Claim, As Articulated in Plaintiffs Motion for Summary Judgment, Is Jurisdictionally Problematic ............................................ 2 VA Did Not Exceed Its Statutory Authority in Entering the Challenged ESAs . 5 A. VAs Interpretations Of Health-Care Resources, Health-Care Support, And Administrative Support Are Reasonable ................................................................................ 8 When Appropriate Deference Or Respect Is Applied To VAs Statutory Interpretation, It Must Be Upheld ............................. 13

CONCLUSION ........................................................................................................ 18

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TABLE OF AUTHORITIES PAGES

Alaska Dep't of Envl. Conservation v. EPA, 540 U.S. 461 (2004) ................................................................................. 14, 15, 16 AT & T Corp. v. Iowa Utils. Bd., 525 U.S. 366 (1999) ................................................................................................7 Bailey v. United States, 516 U.S. 137 (1995) ................................................................................................6 Barnhart v. Walton, 535 U.S. 212 (2002) ....................................................................................... 13, 14 Bowman Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. 281 (1974) ..............................................................................................16 Bragdon v. Abbott, 524 U.S. 624 (1998) ..............................................................................................15 Chevron U.S.A., Inc. v. Nat'l Res. Def. Council, 467 U.S. 837 (1984) ...................................................................................... passim City of Arlington, Texas v. FCC, 133 S.Ct. 1863, 2013 WL 2149789 (May 20, 2013)...............................................7 Clackamas Gastroenterology Assocs., P.C. v. Wells, 538 U.S. 440 (2003) ..............................................................................................16 Conn.t Nat'l Bank v. Germain, 503 U.S. 249 (1992) ..............................................................................................13 Dep't of Treasury v. Fed. Labor Relations Auth., 494 U.S. 922 (1990) ..............................................................................................13 Fed. Express Corp. v. Holowecki, 552 U.S. 389 (2008) ....................................................................................... 15, 17

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Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) ................................................................................................2 Meyer v. Holley, 537 U.S. 280 (2003) ......................................................................................... 7, 14 Natl Cable & Telecomms. Ass'n v. Brand X Internet Servs., 545 U.S. 967 (2005) ..............................................................................................13 Pauley v. BethEnergy Mines, Inc., 501 U.S. 680 (1991) ......................................................................................... 6, 13 Pronsolino v. Nastri, 291 F.3d 1123 (9th Cir. 2002) ...............................................................................14 Schuetz v. Banc One Mortg. Corp., 292 F.3d 1004 (9th Cir. 2002) ...............................................................................14 Shwarz v. United States, 234 F.3d 428 (9th Cir. 2000) ...................................................................................2 Skidmore v. Swift & Co., 323 U.S. 134 (1944) ...................................................................................... passim Smiley v. Citibank (S.D.), N.A., 517 U.S. 735 (1996) ................................................................................................7 Strickland v. Morton, 519 F.2d 467 (9th Cir. 1975) ...................................................................................5 United States v. Haggar Apparel Co., 526 U.S. 380 (1999) ..............................................................................................13 United States v. Mead Corp., 533 U.S. 218 (2001) ..............................................................................................14 United States v. W.R. Grace & Co., 429 F.3d 1224 (9th Cir. 2005) ...............................................................................14

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Wilderness Socy v. U.S. Fish & Wildlife Serv., 353 F.3d 1051 (9th Cir. 2003) ...............................................................................15 STATUTES 5 U.S.C. 706(2) .......................................................................................................1 38 U.S.C 501(a) ......................................................................................................6 38 U.S.C. 7301(b) ...................................................................................................8 38 U.S.C. 7304 ........................................................................................................6 38 U.S.C. 8151 .............................................................................................. passim 38 U.S.C. 8152 .............................................................................................. passim 38 U.S.C. 8153 .............................................................................................. passim

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Congress has given the United States Department of Veterans Affairs (VA) the authority to share health-care resources. Although the relevant statute provides examples of such resources, it does not define that term. VA has applied that term broadly, but reasonably. Plaintiffs challenge VAs reading of the statute under the Administrative Procedure Act (APA), 5 U.S.C. 706(2). They cannot do so successfully. First, Plaintiffs have not demonstrated that they have suffered the sort of injury they would need to face in order to establish their standing to pursue their APA claim. Second, although Plaintiffs state that they are arguing that VA exceeded its statutory authority by interpreting health-care resources too broadly, and are not challenging VAs discretion to decide whether particular agreements to share health-care resources are in the best interest of the VA medical program, they in fact ask the Court to set aside only some of the agreements VA has entered pursuant to the agencys consistent interpretation of health-care resources. Plaintiffs decision not to object to those agreements that they might like or do not take issue with, while selectively challenging others that stand in an identical legal posture for relevant purposes, suggests that they are not asking the Court to exercise its jurisdiction to decide that the agreements were based on a misreading of the law but instead asking the Court to set aside VA policy decisions that Plaintiffs disagree with, or apparently would have made differently had they been their decisions to make. The Court does not have jurisdiction to review such requests. Third, Plaintiffs cannot prevail on the merits. Under settled principles applying to APA review, the construction of a statute adopted by an administrative agency with the responsibility to implement that statute is entitled to a considerable amount of deference. Particularly when the appropriate level of deference is given to VAs construction of the statute, the Court must conclude that Plaintiffs challenge to that construction is baseless. Because their summary judgment motion can amount to nothing that meaningfully goes beyond this focused question

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of statutory construction, the Court should deny Plaintiffs motion, and grant summary judgment to VA on Plaintiffs APA claim in this case. ARGUMENT I. THE APA CLAIM, AS ARTICULATED IN PLAINTIFFS SUMMARY JUDGMENT MOTION, IS JURISDICTIONALLY PROBLEMATIC At the summary judgment stage, the standards for establishing standing are more rigorous than at the motion to dismiss stage of a case. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992). At summary judgment, Plaintiffs bear the burden of showing1 that (1) they have suffered an injury in fact that is concrete and particularized, and actual or imminent (2) the injury is fairly traceable to the challenged conduct and (3) the injury is likely to be redressed by a favorable court decision. See id., 504 U.S. at 561. Plaintiffs here articulate their claim narrowly, limiting it to a challenge to how VA has construed 38 U.S.C. 8151-8153. See Pls. Mot. Summ. J. (PMSJ) 10, May 10, 2013, ECF No. 124. So articulated, the only injury2 Plaintiffs can possibly rely on to establish standing consists of lost [ ] assurance At the motion to dismiss stage, Plaintiffs merely had to allege, not point to evidence that shows, these elements of standing. See Order Granting in Part & Den. in Part Defs. Mot. to Dismiss (Order MTD) 7, Mar. 16, 2012, ECF No. 70 (citing Shwarz v. United States, 234 F.3d 428, 435 (9th Cir. 2000)). In Plaintiffs Opposition to VAs motion to dismiss, adopted by Plaintiffs as part of their summary judgment pleadings, see Pls. Oppn Defs. Mot. Summ. J. (PODMSJ), n.1, May 10, 2013, ECF No. 125, they also claimed to have alleged a procedural injury. However, because that injury related to Plaintiffs allegation that the challenged enhanced sharing agreements (ESAs) should have been executed as Enhanced-Use Leases (EULs), which is a formulation of the APA claim that Plaintiffs appear to have abandoned in their summary judgment briefing, Plaintiffs standing cannot rely on it. See PMSJ 8 (describing Plaintiffs APA claim).
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that land deals unrelated to the sharing of health-care resources on the WLA Campus would result in appropriate space for activities for veterans[,] and lost access to space and opportunities that benefit veterans on the WLA campus. Order Granting in Part & Den. in Part Defs. Mot. to Dismiss (Order MTD) 1011, Mar. 16, 2012, ECF No. 70. Plaintiffs, however, do not point to any evidence that shows that they have been so injured. 3 They fail to even mention this alleged injury when discussing many of the individual agreements.4 More fundamentally, Plaintiffs fail to even argue in their summary judgment briefing that because of the sharing agreements there is insufficient space or opportunity at the WLA campus to benefit Veterans, and they fail to explain why they believe that all space on the campus must be used to directly provide services and opportunities to Veterans, especially in light of a statutory provision authorizing The declarations Plaintiffs rely on do not support their standing claim. See PODMSJ n.1. These declarations merely describe the personal histories of individual Plaintiffs, and their alleged need for permanent supportive housing. The Court has recognized, however, that Plaintiffs requests for permanent supportive housing are distinct from the APA claim. See Order Granting in Part & Den. in Part Defs. Mot. for Recons. (Order Mot. for Recons.) 7, June 19, 2012 , ECF No. 87. The referenced declarations say nothing about the challenged agreements.
4 3

In addition, to the extent Plaintiffs are claiming they have been prevented entirely from using the resources subject to ESAs, it is notable that the ESAs generally provide for at least some ongoing use of the land or resource at issue by Veterans. See e.g., AR 256, 266 (providing for VA to use Brentwood School athletic fields that are the subject of that ESA at mutually convenient times); AR 419 (providing for VA to use Jackie Robinson stadium at its discretion for mutually agreed upon functions); AR 868 (ESA providing for Veterans Park Conservancy to develop on the Shared Property such Capitol Improvements as, by agreement of the parties, will enhance, protect, preserve and improve the . . . National Veterans Park, and further its use as an historically-significant open space on the West Los Angeles VA campus, for benefit of veterans and the general public); AR 903 (providing that a field subject to filming agreement may be used by VA Veterans group, VA employees, VA facilities management, film studios, or Veteran Service Organization).

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sharing agreements with non-VA entities, to effectively utilize certain other health-care resources. 38 U.S.C. 8153(a)(1). 5 Even if Plaintiffs had standing, many of their arguments should be rejected by the Court because they do not relate to the APA claim as framed by Plaintiffs in their motion i.e., as a challenge to the agencys construction of a statute. Plaintiffs limiting their claim to a challenge about statutory construction is appropriate from a jurisdictional standpoint: Anything beyond that limited challenge would implicate decisions that are committed to VAs discretion, which the Court does not have jurisdiction to review. See Defs. Mot. for Summ. J. (DMSJ) 3-6, April 10, 2013, ECF No. 116 (describing exception from APA review for acts committed to an agencys discretion). To the extent that Plaintiffs address the process by which VA made its discretionary decisions to enter into any of the challenged agreements, or question the merits of such decisions, their criticisms have nothing to do with statutory construction,6 and everything to do Plaintiffs also lack standing for temporal reasons. The Court has indicated that Plaintiffs do not have standing to challenge individual land use agreements that were no longer in effect when the First Amended Complaint (FAC) was filed, See Order Granting in Part & Den. in Part Pls. Mot. to Supplement the AR (Order Mot. To Supp.) 5, Jan. 22, 2013, ECF. No. 108, and most of the challenged agreements had expired by the time the FAC was filed. See Notice, Feb. 19, 2013, ECF No. 112; AR 186-87. Because there was never a Barrington Park ESA, see AR 1628-38, Plaintiffs do not have standing to challenge that agreement as exceeding VAs ESA authority. Finally, in the Order MTD, the Court described Plaintiffs alleged injury-in-fact as follows: [W]hen the VA GLA entered into ESAs after 2008, Plaintiffs lost the assurance that land deals . . . would result in appropriate space for activities for veterans. Order MTD 10 (emphasis added). Because the only agreements Plaintiffs challenge that were executed after 2008 expired before the FAC was filed, this alleged injury cannot support Plaintiffs standing. See AR 1317-1626. Another aspect of Plaintiffs briefing that is irrelevant to the one element of this case as to which the Court has jurisdiction is that Plaintiffs take issue with the supposed absence from the record of documentation that does not fit within the scope of the AR as construed by the Court. This alleged absence is totally
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with Plaintiffs disagreement with certain of the VAs policy choices. These policy choices, such as Plaintiffs expressed preference for the four agreements in the AR that Plaintiffs have decided not to challenge, even though they are similar in construct to the ones they do challenge in the relevant respects,7 are committed to the agencys discretion and are beyond the scope of this Courts jurisdiction. See DMSJ 3-11; see, e.g., Strickland v. Morton, 519 F.2d 467 (9th Cir. 1975). II. VA DID NOT EXCEED ITS STATUTORY AUTHORITY IN ENTERING THE CHALLENGED ESAS Even if the Court has jurisdiction to review Plaintiffs APA claim, Plaintiffs motion for summary judgment should be denied. Plaintiffs motion is premised on the notion that 38 U.S.C. 8153 is clear, and that it unambiguously supports Plaintiffs position and thus undoubtedly should be interpreted in a manner that supports their claim. It is hardly even clear, however, what Plaintiffs say the irrelevant to the statutory construction claim. And, in any event, the Court has made clear that the AR consists of all documentation before the VA at the time that it decided to enter into each one of the challenged ESAs. Order Mot. To Supp. 11. Therefore, Plaintiffs complaints about an alleged lack of documentation postdating the challenged decisions, see PMSJ 18-19, are meaningless. Plaintiffs claim that VA exceeded its authority in entering the other agreements in the AR because those agreements do not involve the provision of health-care. However, the four land use agreements that Plaintiffs have decided, without explanation, not to challenge are not used for the provision of health-care any more than are the agreements that Plaintiffs do challenge as exceeding VAs statutory authority pursuant to 38 U.S.C. 8153. The ESAs Plaintiffs have decided not to challenge concern provision of housing and related services, and administration and management of a golf course and garden on the WLA campus. See AR 448-521 (agreement to share space in VHA building for provision of transitional housing and related social services); AR 524-611 (same); AR 668823 (agreement for sharing the business and financial administration of a golf course); AR 294-331 (agreement for sharing the business and financial administration of a garden). Although these agreements benefit Veterans, Plaintiffs have not explained why they believe these four agreements concern the provision of health-care while the agreements they challenge do not.
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statute means. Not only is Plaintiffs contention about VAs authority to enter into agreements to share health-care resources internally inconsistent8 and contradictory; in fact, Plaintiffs unsupported and inconsistent interpretations of the key statutory provisions9 illustrate the important gaps and ambiguities that Congress left for VA, the agency entrusted with administering the statute, to fill. Because of these ambiguities or gaps, and because Congress delegated to VA the general authority to promulgate regulations to implement this and other statutory provisions VA administers,10 the extent of judicial review of the agencys policy determinations is limited. Pauley v. BethEnergy Mines, Inc., 501 U.S. 680, 696 Plaintiffs appear to offer multiple, conflicting definitions of what constitutes an authorized health-care resource sharing agreement. They fail to consistently say whether they believe health-care resource to be defined by the nature of the resource, the use to which a resource could be put, the use to which a resource would be put under a particular agreement, or something else entirely.
9 8

Plaintiffs argument that VA has misinterpreted what Plaintiffs claim is the unambiguous meaning of the enhanced sharing authority seems to ignore several separate terms contained within the statutory description of health-care resource, a term that is described in 38 U.S.C. 8152(1) as including hospital care and medical services (as those terms are defined in section 1701 of this title), services under Sections 1782 and 1783 of this title (i.e., Title 38), any other health-care service, and any health-care support or administrative resource. 38 U.S.C. 8152(1). See PMSJ 12. Plaintiffs reading of the statute would violate a wellrecognized principle of statutory interpretation, by rendering the terms health-care support and administrative resource superfluous. See, e.g., Bailey v. United States, 516 U.S. 137, 146 (1995) (we assume that Congress used two terms because it intended each term to have a particular, nonsuperfluous meaning). In addition, as discussed infra at n.14, Plaintiffs reading of Section 8153 ignores the phrase to effectively utilize certain other health-care resources, which violates this same principle of statutory interpretation.

See 38 U.S.C 501(a)(giving VA general regulatory authority); 38 U.S.C. 7304(a), (b) (giving VAs Veteran Health Administration (VHA) regulatory authority necessary to the administration of the Veterans Health Administration subject to the Secretarys approval).

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(1991). See also, e.g., Meyer v. Holley, 537 U.S. 280, 287-88 (2003) ([W]e ordinarily defer to an administering agencys reasonable interpretation of a statute) (deferring to a HUD regulation) (citing both Chevron U.S.A., Inc. v. Natl Res. Def. Council, 467 U.S. 837, 842-45 (1984) and Skidmore v. Swift Co., 323 U.S. 134, 140 (1944)). As the Supreme Court has recently explained: Chevron is rooted in a background presumption of congressional intent: namely, that Congress, when it left ambiguity in a statute, administered by an agency, understood that the ambiguity would be resolved, first and foremost, by the agency and desired the agency (rather than the courts) to possess whatever degree of discretion the ambiguity allows. Smiley v. Citibank (South Dakota), N.A., 517 U.S. 735, 740-41 (1996). Chevron thus provides a stable rule against which Congress can legislate: Statutory ambiguities will be resolved, within the bounds of reasonable interpretation, not by the courts but by the administering agency. See [AT & T Corp. v. Iowa Utilities Bd., 525 U.S. 366, 377-78 (1999)]. Congress knows to speak in plain terms when it wishes to circumscribe, and in capacious terms when it wishes to enlarge, agency discretion. City of Arlington, Tex. v. FCC, 133 S.Ct. 1863 (2013). Because VA has applied the relevant statutory language in a way that is not foreclosed by the statute, its interpretation should not be set aside. Instead, VAs reasonable interpretation should be upheld.

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A.

VAs Interpretations Of Health-Care Resources, Health-Care Support, And Administrative Support Are Reasonable.

The provision at issue here says: (1)The term health-care resource includes hospital care and medical services (as those terms are defined in section 1701 of this title), services under sections 1782 and 1783 of this title, any other health-care service, and any healthcare support or administrative resource. 38 U.S.C. 8152(1). VA has construed health-care resources to include the sharing of medical space. The agency has read that term, in turn, to mean space controlled by the Veterans Health Administration (VHA), the organization within VA that is responsible for providing medical care and services to the nations Veterans.11 Thus, VAs internal guidance documents reflect VAs interpretation that medical space, referenced in 38 U.S.C. 8153(a)(3)(A), includes any real property under VHAs control. The agency describes 38 U.S.C. 8151-8153 as providing that VA may enter into an agreement with an entity for the use of underutilized VHA space. AR 149 (emphasis added).12 VA understands health-care resources to include hospital and ambulatory care, mental health services, medical and surgical services, examinations, treatment, rehabilitative services, dental services and appliances, preventive healthcare, prosthetics, and other health-care services and supplies. AR 16 (VHA Directive 97-015 (March 12, 1997)). In addition, VA has noted that the term
11

See 38 U.S.C. 7301(b) (describing primary function of Veterans Health Administration). VHA Directive 1660.1, Handbook 1660.1 and Handbook 1820.1 (AR 26, 46, 61) offer that [e]nhanced sharing agreements for the use of VA space (including parking, outdoor recreational facilities and vacant land) are authorized under 38 U.S.C. Section 8153. Because these are VHA handbooks and the statute specifically limits the entities that can enter ESAs to department health-care facilities, see 38 U.S.C. 8153(a)(1), it is clear that these references to vacant space and recreational facilities can refer only to VHA-controlled space at department health-care facilities.

12

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health-care resources also includes any health-care support and administrative resources, including medical equipment or space. Id. The agency distinguishes between health-care support and administrative resource in explaining that whereas [h]ealth care support resources serve medically related purposes . . . [a]dministrative resources include services not unique to the provision of medical care, but deemed necessary to support such care. AR 24; see also AR 43. VA has thus interpreted health-care resources to include the sharing of medical space which may be any real property (i.e., land, improvements, and/or space) under VHAs control, because such property may either be used directly to serve medically-related purposes or may be deemed necessary for the provision of medical care.13 This definition is reasonable in light of the statutes purpose to make use of underutilized VA resources. See 38 U.S.C. 8153(a)(1); AR 149. Legislative history supports this interpretation. Prior to the 1996 Amendment of VAs Enhanced Sharing Authority, the law permitted only the sharing of specialized medical resources. In 1993, Congress expanded the scope of resources that VA could share with state Veterans homes, permitting the sharing of health-care resources. Health-Care for Persian Gulf Veterans, Pub. L. No. 103-210, 3, 107 Stat. 2496 (1993). The term health-care resources was described in the new legislation as referring to hospital care, medical services, and rehabilitative services as those terms are defined in . . . section 1701 [of Title 38] any other health-care service[s], and any health-care support or administrative resource. Id. The breadth of this authority is demonstrated by the fact that
13

Keeping some vacant or undeveloped land in that state is also deemed by VHA to be necessary to serving its mission of providing high quality health-care to Veterans on the WLA campus. For example, VAs Master Plan for the WLA campus notes that open space is an important characteristic of the WLA campus, AR 162 and that one of VHAs objectives in managing the WLA campus is [p]artner[ing] with the community to make the campus environment aesthetically pleasing, showing respect for the service of veterans. AR 174.

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Congress listed such resources as grounds maintenance, laundry, housekeeping, and pharmacy as examples of health-care resources to be shared. H.R. Rep. No. 92, 103rd Cong., 1st Sess. 1993. Thus, Congress specifically intended this 1993 amendment to cover all of those resources that supported the operation of a medical facility, even if they were not directly related to provision of medical care to a Veteran (or other eligible) patient. The subsequent expansion of VAs general Sharing Authority in 1996, under the provisions codified at 38 U.S.C. 8151-8153, used virtually identical language as the 1993 amendment in describing the resources that VA was authorized to share. Furthermore, Congress indicated in 38 U.S.C. 8151-8153 that it intended to give VA at least the same broad authority to share resources with other entities as it could already share with state Veteran homes. See Joint Explanatory Statement, 142 Cong. Rec. S11648 (1996) Plaintiffs have offered no alternative interpretation for health-care resource or administrative support that would suggest that the statute forecloses VAs interpretation. Indeed, based upon the plain meaning of these words, VAs interpretation is permissible and reasonable. As to administrative resource, one meaning of administrative is pertaining to management of affairs, while one meaning of resource is a stock or reserve which can be drawn on when necessary. New Shorter Oxford English Dictionary (4th Ed. 1993) 28, 2565. Thus it is not only permissible but reasonable in the statutory context, for VA to interpret administrative resource to include the land, improvements, and space that VHA controls, manages, and may use when necessary. Turning to health-care support, one definition of support is thing which supports or [a] supporter, a prop, a stay. Id. 3153. Thus VA has permissibly and reasonably construed health-care support to mean a thing which supports the provision of health care. In light of the dictionary definitions of these terms, as well as the overall purpose of VAs enhanced sharing authority, VA reasonably

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interpreted administrative resource and health-care support to include all real property under VHAs control, which could potentially be used directly or indirectly to support VAs provision of health-care services to Veterans.14 In contrast, Plaintiffs have failed to offer any reasonable alternative interpretation of health-care resource. Notwithstanding repeated assertions that the meaning of health-care resource is clear from the statute itself, Plaintiffs have failed to articulate a consistent, coherent definition of the health-care resources that VA is authorized to enter agreements to share pursuant to 38 U.S.C. 8151-8153. It cannot be, as Plaintiffs appear to argue, that whether a building or piece of land constitutes a health-care resource depends upon how the parties to a sharing agreement intend to use it. See PMSJ 12 (a heath care support resource could be a laundry facility that is used to wash bedding used in a hospital, while a health-care administrative resource could be a digital filing system for medical records.). The statute itself includes no requirement that the resources subject to ESAs be used to provide health-care services. See 38 U.S.C. 8151-8153. And it cannot be that, as Plaintiffs appear to argue in other places, that whether a building or piece of land constitutes a health-care resource hinges upon whether the sharing agreement would result in the provision of health-care services to Despite VAs clear interpretation of health-care resources in 38 U.S.C. 8153(a)(1) as limiting land that can be the subject of ESAs to VHA-controlled property, and the sharing statutes authorization of agreements for the mutual use, or exchange of use, of health-care resources between Department health-care facilities and any health-care provider, or other entity or individual, id. (emphasis added), Plaintiffs mischaracterize VAs interpretation by asserting that VA interprets the statute to allow the agency to lease its property to any entity for any purpose. PMSJ 1. Plaintiffs also inaccurately characterize the challenged agreements as purely commercial land deals and the sharing agreements in the AR as leases. See, e.g., PMSJ 15. Leases, in fact, convey very different property interests than the sharing agreements at issue here. And the non-profit entities that entered into some of the sharing agreements at issue are hardly commercial enterprises.
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Veterans. See PMSJ 19 (stating that the ESA with West Side Breakers Soccer Club contains no provisions that benefits veterans, much less involving the provision of health-care to veterans). For example, if Plaintiffs understanding of health-care resource were to be applied to the sharing of medical equipment, which falls within the description of health-care resource in Section 8151, no agreement for VA to sell a health-care resource (i.e., effectively use certain other health-care resources pursuant to Section 8153(a)(1)) to a non-Veteranfocused entity would be lawful under the statute. Instead, VA would have authority only to purchase the use of medical equipment from another entity to use in providing health-care services to Veterans.15 Because Plaintiffs interpretation would render a significant portion of Section 8153 meaningless, it cannot work.16 More to the point, Plaintiffs have not shown, and cannot show, that VAs interpretation is unreasonable. VA has construed 8153 to authorize VA to both sell and acquire use of healthcare resources. See 38 U.S.C. 8153 (authorizing VA either to secure healthcare resources which otherwise might not be feasibly available, or to effectively utilize certain other health-care resources by means of an ESA) (emphasis added); AR 16 (VHA Dir. 97-15) (policy directive noting that sharing statute provides opportunity for sales of services to generate revenue to be used to maintain and expand services for Veterans).
16 15

Plaintiffs proposed interpretation(s) should also be rejected because the canons of construction and other interpretive tools Plaintiffs marshal do not actually support their interpretation. Plaintiffs contend that their interpretation of 8152(1)s description of health-care resource is consistent with the principle of ejusdem generis, or a general term following more specific terms means that the things embraced in the general term are of the same kind as those denoted by the specific terms. PSJM 12. However, this principle is inapplicable here because the term (health-care support or administrative resource) to which Plaintiffs attempt to apply it, is not a general term following more specific terms. Rather this phrase consists of two general terms, following another general term, which follows a list of specific terms. See 38 U.S.C. 8152(1) (the term health-care resource includes hospital care and medical services . . . services under sections 1782 and 1783 of this title, any other health-care service, and any health-care support or
Case No. 11-cv-04846 Memorandum in Opposition to Plaintiffs Motion for Summary Judgment Page 12

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 When Appropriate Deference Or Respect Is Applied To VAs Statutory Interpretation, It Must Be Upheld VAs interpretation of the scope of its own authority to enter into agreements for the sharing of health-care resources pursuant to 38 U.S.C. 8151-8153 must be upheld as long as it is not flatly contradicted by the plain language of the statute, see Dept of the Treasury v. Fed. Labor Relations Auth., 494 U.S. 922, 928 (1990), even if VAs interpretation is not the best or most natural interpretation. See, e.g., Pauley, 501 U.S. at 702; Nat'l Cable & Telecomms. Ass'n v. Brand X Internet Servs., 545 U.S. 967, 980 (2005); United States v. Haggar Apparel Co., 526 U.S. 380, 394 (1999) . Plaintiffs are mistaken in asserting that VAs interpretation is entitled to no deference merely because it has not been set forth in notice-and-comment rulemaking or issued in the context of an adjudication. See PMSJ 13. An agency authorized by Congress to promulgate rules with the force of law does not need to engage in rulemaking in order for its interpretation of the statute it administers to be accorded Chevron deference. See, e.g., Barnhart v. Walton, 535 U.S. 212, 221 (2002) (applying Chevron deference to EPA interpretation made through means less formal than notice-and-comment rulemaking). administrative resource). Ejusdem generis might support an interpretation of any other health-care service but it is not controlling in terms of how health-care support or administrative resource can be interpreted or defined. Similarly unpersuasive is Plaintiffs argument that VAs interpretation of health-care resource should be rejected, because it would render superfluous VAs Enhanced-Use Leasing statute. As explained above, Plaintiffs rely on a mischaracterization of VAs position in order to reach this conclusion. See supra n. 14. Moreover, the Supreme Court has specifically rejected this logic. See Connecticut Natl Bank v. Germain, 503 U.S. 249, 253 (1992) (redundancies across statutes are not unusual events . . . and so long as there is no positive repugnancy [e.g. rendering one or the other wholly superfluous] between two laws . . . a court must give effect to both). VAs enhanced-use leasing statute and enhanced sharing authority are not co-extensive or interdependent. Thus, Plaintiffs argument in that regard should be rejected.
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In addition, courts do not necessarily draw a bright-line distinction between Chevron deference and the lesser deference or respect afforded to agency decision letters, internal guidance documents, handbooks, and other less formal articulations of agencies statutory interpretations, pursuant to Skidmore v. Swift, 323 U.S. 134 (1944). See, e.g., Meyer, 537 U.S. at 287-88(citing both Chevron and Skidmore in support of statement that we ordinarily defer to an administering agencys reasonable interpretation of a statute.). As the Ninth Circuit has noted, [f]ollowing [United States v. Mead Corp., 533 U.S. 218, 226-27 (2001)], the continuum of agency deference has been fraught with ambiguity. United States v. W.R. Grace & Co., 429 F.3d 1224, 1235 (9th Cir. 2005) (emphasis added). In some instances, courts have applied Chevron deference even though an agency reached its interpretation through means less formal than notice and comment rulemaking.17 In other instances, however, courts have upheld agency interpretations even when applying the modified deference standard affording respect to agencies informal interpretations. See, e.g., W.R. Grace & Co., 429 F. 3d at 1236 (upholding EPAs informal interpretation of its own action cleaning up asbestos mine as removal within meaning of CERCLA); accord Alaska Dept of Env. Conservation v. EPA, 540 U.S. 461, 487-88 (2004) (upholding EPAs interpretation of statute in internal agency memorandum when affording the interpretation Skidmore respect rather than Chevron deference). Still other courts have simply declined to decide whether Chevron or Skidmore deference applies, where they find that an agency interpretation may be upheld under the less deferential Skidmore standard. See, e.g., Pronsolino v. Nastri, 291 F.3d 1123, 1133, 1134-35 (9th Cir. 2002) (declining to decide whether Chevron or Skidmore applies, because interpretation contained in EPA policy, regulations and practice is upheld even under Skidmore standard). Whatever standard of deference or See, e.g., Schuetz v. Banc One Mortg. Corp., 292 F.3d 1004, 1012-14 (9th Cir. 2002) (giving Chevron deference to HUD policy statement)); Barnhart, 535 U.S. at 221.
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respect applies here, VAs interpretations of statutory provisions that Congress has authorized VA to administer must be upheld because the agency interpretations are reasonable, and are not foreclosed by the language of the statute. Plaintiffs maintain that VAs statutory interpretations, expressed in the ESAs themselves and in internal VA policy documents, handbooks, and guidance materials are not due any weight under Mead and Skidmore, because they contain no reasoned analysis. PMSJ 21. Plaintiffs rely for this proposition on Wilderness Society v. U.S. Fish & Wildlife Service, 353 F.3d 1051 (9th Cir. 2003) (en banc), in which the Ninth Circuit declined to give deference to a determination by the U.S. Fish and Wildlife Service because it found that Congress had spoken clearly to foreclose the agencys interpretation. Id. at 1062. Here, however, there can be no similar conclusion that Congress has spoken clearly as to the meaning of healthcare resource since Congress provided no definition of the terms health-care support or administrative resource, which are included within the statutory description of health-care resource contained in 38 U.S.C. 8152(1). Even if only Skidmore respect applies to VAs statutory interpretation here, it should nevertheless be upheld. See Alaska Dept of Env. Conservation, 540 U.S. at 487-88 . Where, as here, an agencys policy statements, embodied in its compliance manual and internal directives, interpret . . . the statute itself [,]. . . assuming these interpretive statements are not entitled to Chevron deference, they [] reflect a body of experience and informed judgment to which courts and litigants may properly resort for guidance. Fed. Express Corp. v. Holowecki, 552 U.S. 389, 399 (2008) (quoting Bragdon v. Abbott, 524 U.S. 624, 642 (1998)). Here, VHAs experience and informed judgment consist not only of its expertise in providing medical care to Veterans, but also its experience in managing the use of all healthcare resources available on its medical campuses, in keeping with multiple statutory requirements, numerous (and sometimes competing) objectives, and the complexities associated with VAs healthcare and related services to

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Veterans (and sometimes, non-Veterans). See generally AR 155-89 (West Los Angeles VA Medical Center Veterans Programs Enhancement Act of 1998 Master Plan). VAs interpretation of the statute it is entrusted by Congress to administer should be upheld, even if it is expressed with less than ideal clarity, as long as the agencys path may reasonably be discerned. Alaska Dept of Env. Conservation, 540 U.S. at 497 (quoting Bowman Transp., Inc. v. Ark. Best Freight System, Inc., 419 U.S. 281, 286 (1974)). Here, where the agencys interpretation is not articulated via promulgation of regulations or via formal adjudication, VAs statutory interpretations expressed in its policy guidance handbooks and directives need not be read in isolation, but instead may be considered reflective of the agencys statutory interpretation and an explanation of when VA may enter into specific proposed ESAs. See id. (EPAs skeletal orders . . . surely are not composed with ideal clarity . . . however, are properly read together with accompanying explanatory correspondence . . . the Agencys comments and orders adequately ground [the Agencys] determination.). Here, the parameters of VAs understanding and interpretation of health-care resources are not only delineated in the agencys policy handbooks and directives, but also exemplified in VAs decision-making regarding proposed ESAs. By deciding to enter a proposed land-use agreement as an ESA, VA expresses its interpretation that that agreement is for use of a health-care resource, and is permitted under the ESA authority. Although an agencys statutory interpretation is not controlling, if it is expressed in agency policy manuals, the interpretation may nevertheless be persuasive. See Clackamas Gastroenterology Assocs., PC v. Wells, 538 U.S. 440, 449 (2003) (EEOC compliance manual was persuasive to Court in determining whether director-shareholder physicians should be counted as employees under the Americans with Disabilities Act). Here, VAs

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interpretation of health-care resources is persuasive because it is permissible given the language, structure, and legislative history of the statute and because it enables VA, through VHA, to appropriately administer the resources available to meet the health-care needs of Veterans -- in a practical manner that takes into account and balances various (and sometimes competing) concerns and priorities. In determining how persuasive a statutory interpretation expressed in agency policy statements may be, one factor a court may consider is whether the agency has applied its position with consistency. Fed Ex., 552 U.S. at 399 (upholding agencys interpretation where it had been applied by EEOC staff for at least five years, even where the agencys implementation of this policy has been uneven). Here, VAs interpretation of health-care resource to be VHA-controlled property has been applied by the agency consistently since 1997. See generally AR 16-88 (agency guidance); AR 191-1046 (application to decisions to enter specific ESAs). Finally, just as Plaintiffs objections to VAs policy decisions to select one sharing partner or another are not legally relevant to Plaintiffs statutory interpretation claim under the APA, neither are Plaintiffs miscellaneous claims that the Administrative Record does not sufficiently document the implementation of some of the challenged ESAs. Although the Court has made clear that the Administrative Record in this case consists of all documentation before VA at the time that it decided to enter into each one of the challenged ESAs, Order Mot. to Supp. 11, Plaintiffs inexplicably point out the unsurprising fact that the Record does not contain documentation postdating the challenged decisions. See supra n.8. This challenge, like Plaintiffs attacks on VAs decision-making discussed above, fails because Plaintiffs fail to point to any record evidence that VA acted outside of its statutory authority under 38 U.S.C. 8151-8153, as reasonably interpreted by VA itself.

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Dated: June 12, 2013

CONCLUSION Plaintiffs fail to show that VAs interpretation of 38 U.S.C. 8151-8153 is unreasonable and do not point to any evidence that VA acted outside of its statutory authority under 38 U.S.C. 8151-8153 as reasonably interpreted by VA. Accordingly, Plaintiffs motion for summary judgment must be denied.

Respectfully submitted, STUART F. DELERY Acting Assistant Attorney General ANDRE BIROTTE JR. United States Attorney LEON W. WEIDMAN Chief, Civil Division ALARICE M. MEDRANO Assistant United States Attorney JUDRY L. SUBAR Assistant Branch Director By: /s/ Elisabeth Layton ELISABETH LAYTON Senior Counsel KAREN S. BLOOM Trial Attorney U.S. Department of Justice Civil Division Federal Programs Branch 20 Massachusetts Ave., N.W. Washington, DC 20001 T: (202) 514-3183;F: (202) 616-8470 Email: Elisabeth.Layton@usdoj.gov Attorneys for Defendants

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