State of Wisconsin et al v. Vilsack et al
Filing
18
DECISION AND ORDER Granting Motion to Dismiss 11 signed by Judge Charles N Clevert, Jr on 9/28/16. (cc: all counsel) ((cef), C. N. Clevert, Jr.)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
STATE OF WISCONSIN,
KITTY RHOADES,
Plaintiffs,
v.
Case No. 15-C-0855
TOM VILSACK,
KEVIN CONCANNON,
AUDREY ROWE,
JESSICA SHAHIN,
SUSAN HOLZER,
Defendants.
DECISION AND ORDER GRANTING MOTION TO DISMISS (DOC. 11)
The State of Wisconsin and Kitty Rhoades, Secretary of the Wisconsin Department
of Health Services (WDHS), sue U.S. Secretary of Agriculture Tom Vilsack and other
federal officials at the U.S. Department of Agriculture (USDA) seeking a declaration that
Wisconsin’s drug testing requirement for food-stamp recipients is valid. The plaintiffs claim
that defendants’ final agency actions concerning 7 U.S.C. § 2014(b) and 7 C.F.R.
§ 273.2(a) are arbitrary and capricious, contrary to constitutional right, and in excess of
statutory and jurisdictional authority. According to plaintiffs, a real, actual, and continuing
controversy exists between the parties as to whether Wisconsin’s drug testing requirement,
Wis. Stat. § 49.79(9)(d), is preempted by federal law and whether a specific food-stamp
provision, 7 C.F.R. § 273.2(a), was amended or invalidated by a superseding federal law
regarding welfare recipients, 21 U.S.C. § 862b.
The defendants move to dismiss under Fed. R. Civ. P. 12(b)(1) and (6). A motion
to dismiss under Rule 12(b)(1) challenges the jurisdiction of this court over the subject
matter related in the complaint. See Fed. R. Civ. P. 12(b)(1). A Rule 12(b)(6) motion
challenges the sufficiency of the complaint to state a claim upon which relief may be
granted. See Fed. R. Civ. P. 12(b)(6).
When examining a complaint respecting a motion to dismiss, all well-pleaded facts
are assumed to be true, and all such facts, as well as the reasonable inferences therefrom,
are viewed in the light most favorable to the plaintiff. Gutierrez v. Peters, 111 F.3d 1364,
1368-69 (7th Cir. 1997). Any documents attached to the complaint, documents that are
critical to the complaint and referred to in it, and information subject to judicial notice may
be considered by the court in reviewing a Rule 12(b)(1) or 12(b)(6) motion. See Geinosky
v. City of Chicago, 675 F.3d 743, 745 n.1 (7th Cir. 2012); Matthews v. Hughes, No. 14 C
7582, 2015 WL 5876567, *1 (N.D. Ill. Oct. 5, 2015). However, regarding a Rule 12(b)(1)
motion the court may, in addition, take into account evidence submitted with the briefs to
determine whether in fact subject matter jurisdiction exists. Evers v. Astrue, 536 F.3d 651
(7th Cir. 2008).
ALLEGATIONS IN THE AMENDED COMPLAINT
The federal Supplemental Nutrition Assistance Program (SNAP), created in 1964,
provides assistance for low- and no-income individuals to purchase food. (Doc 9, ¶ 24.)
SNAP benefits are administered jointly by federal and state officials. (Doc. 9, ¶ 24.)
Federal law sets forth various eligibility requirements for recipients of SNAP benefits,
including a work requirement for certain able-bodied adults without dependents (ABAWDs).
(Doc. 9, ¶ 5.) Wisconsin law then contains a work requirement for certain ABAWDs that
can be satisfied through participation in the FoodShare (Wisconsin’s name for SNAP)
employment training program (FSET). (Doc. 9, ¶ 7.) States are not allowed to impose any
2
additional eligibility conditions upon food-stamp recipients except those expressly permitted
by regulation in accordance with 7 C.F.R. § 273.2(a). (Doc. 9, ¶ 31.)
In 1996, reforms were made to federal welfare programs, including 21 U.S.C.
§ 862b, which states: “Notwithstanding any other provision of law, States shall not be
prohibited by the Federal Government from testing welfare recipients for use of controlled
substances nor from sanctioning welfare recipients who test positive for use of controlled
substances.” (Doc. 9, ¶¶ 25-29.)
Wisconsin Act 55 took effect on July 14, 2015. Act 55 set forth new drug screening
and testing requirements for certain FoodShare recipients who are ABWADs participating
in Wisconsin’s FSET program. (Doc. 9, ¶¶ 8, 36.) In particular, Wis. Stat. § 49.79(9)(d)1
provides that WDHS
shall promulgate rules to develop and implement a drug screening, testing,
and treatment policy to screen and, if indicated, test and treat participants in
an employment and training program under this subsection who are ablebodied adults for use of a controlled substance without a valid prescription for
the controlled substance.
(Doc. 9, ¶ 37.) In addition, Wis. Stat. § 49.79(1m) provides that “[a]n individual who is a
recipient under the food stamp program is considered to be a welfare recipient for purposes
of 21 USC 862b.” (Doc. 9, ¶ 39.)
On May 27, 2015, prior to the enactment of Act 55, defendant Susan Holzer emailed
WDHS, indicating that she was aware of the proposal to require drug testing for certain
FoodShare receipients. (Doc. 9, ¶ 43.) She wrote:
As you are aware, States are prohibited under Federal law from
imposing any additional eligibility conditions on individuals for the receipt of
SNAP benefits. Therefore, [Food and Nutrition Service (FNS)] will continue
to monitor closely any action the Wisconsin State Legislature takes on this
legislation. If the legislation is subsequently enacted into law, FNS will work
3
with its General Counsel to determine how it interacts with Federal law
governing the program and advise the State agency appropriately.
(Doc. 9, ¶ 43, attach. 2.)
Plaintiffs filed this lawsuit on the same day that Act 55 took effect, i.e., July 14, 2015.
As alleged by plaintiffs, on or about July 15, 2015, after the filing of this case, defendant
Vilsack “issued a public statement claiming that Wisconsin’s FoodShare reforms” as
described above “violate federal law.” (Doc. 9, ¶ 45.1) However, plaintiffs did not attach
to their amended complaint any evidence regarding exactly what Vilsack said. In their
opposition brief, plaintiffs indicate that Vilsack’s statements were widely reported in the
news media, and they provided a website citation to an associated press article dated
July 15, 2015. (Doc. 13 at 7 n.5.2)
On September 8, 2015, Wisconsin Governor Scott Walker issued a “Statement of
Scope” regarding the development by WDHS of administrative rules to implement the drugtesting provisions of the FoodShare reforms. (Doc. 9, ¶¶ 40-41; Doc. 11 Ex. 1.)
A June 3, 2014, letter from the USDA to the State of Georgia read, in part:
FNS policy prohibits States from mandating drug testing of SNAP
applicants and recipients. Section 5(b) of the Food and Nutrition Act and
7 C.F.R. § 273.2(a) expressly prohibit States from imposing additional
standards of eligibility for SNAP participation. Requiring SNAP applicants
1
Docum ent 9 is an am ended com plaint, explaining how the allegations here include alleged events
occurring after the original com plaint was filed.
2
The citation did not work when the court tried it. However, the court found the AP article reported
elsewhere. The article quotes Vilsack as actually saying that “Congress has ‘repeatedly rejected the
expensive, intrusive practice of suspicionless drug testing,’ which . . . has been shown to uncover ‘very little
drug
us e.’”
V ilsack:
Federal
law
bars
W is c ons in
food
stam p
tes ting,
http://fox11online.com /news/state/vilsack-federal-law-bars-wisconsin-food-stam p-drug-testing (last visited
Sept. 19, 2016). The AP article is hearsay as to what Vilsack actually said and thus cannot be used by the
court. But plaintiffs do not dispute that the article quotes a statem ent very different from that alleged in the
am ended com plaint. Instead, they contend that a disagreem ent about the content of Vilsack’s statem ent is
not a m atter that a court should sort out on a m otion to dism iss. (Doc. 13 at 19.) W hile that position m ay be
correct regarding a Rule 12(b)(6) m otion, it is not correct as to a Rule 12(b)(1) m otion. The court could have
considered an affidavit from Vilsack. But it cannot use the online newspaper story for the truth of what Vilsack
said.
4
and recipients to pass a drug test in order to receive benefits would constitute
an additional condition of eligibility, and therefore, is not allowable under law.
. . . . FNS shares the State’s commitment to program integrity and is
available to provide guidance and technical assistance on options available
to Georgia to help promote program integrity and ensure program access
consistent with Federal law and regulation.
(Doc. 9, ¶ 44, attach. 3.)
ANALYSIS
Defendants argue primarily that this case is not ripe for review. (Doc. 12 at 15.) The
ripeness doctrine stems from Article III, section 2 of the U.S. Constitution, which limits the
jurisdiction of federal courts to “cases” and “controversies.” The basic rationale of the
ripeness doctrine “is to prevent the courts, through avoidance of premature adjudication,
from entangling themselves in abstract disagreements over administrative policies, and
also to protect the agencies from judicial interference until an administrative decision has
been formalized and its effects felt in a concrete way by the challenging parties.” Abbott
Labs. v. Gardner, 387 U.S. 136, 148-49 (1967) (abrogated on other grounds by Califano
v. Sanders, 430 U.S. 99 (1977)).
Plaintiffs bring their claims under the Administrative Procedures Act and Declaratory
Judgements Act, which allows for pre-enforcement review of final agency action and a
declaration of the legal rights and relations of parties in interest. (Doc. 9 at 14.) When
determining whether a controversy is ripe for pre-enforcement review of a statute or
regulation, two criteria are evaluated: “the fitness of the issues for judicial decision and the
hardship to the parties of withholding court consideration.” Abbott Labs., 387 U.S. at 148.
5
A.
Fitness of the issue for judicial decision
To determine whether the issue is fit for judicial decision, the court should examine
whether the action in question constitutes final agency action and whether the issue raises
a purely legal question. See id. at 148-49.
The Administrative Procedures Act defines agency action as “the whole or a part of
an agency rule, order, license, sanction, relief, or the equivalent or denial thereof, or failure
to act.” 5 U.S.C. § 551(13). For agency action to be considered final, two conditions must
be met: “First, the action must mark the consummation of the agency’s decisionmaking
process—it must not be of a merely tentative or interlocutory nature. And second, the
action must be one by which rights or obligations have been determined, or from which
legal consequences will flow.” Bennett v. Spear, 520 U.S. 154, 177-78 (1997) (internal
quotation marks and citations omitted). “The core question is whether the agency has
completed its decisionmaking process, and whether the result of that process is one that
will directly affect the parties.” W. Ill. Home Health Care, Inc. v. Herman, 150 F.3d 659, 662
(7th Cir. 1998).
Plaintiffs assert that each of the following three communications by the defendant
constitutes final agency action: the email sent from the USDA to the State of Georgia on
June 3, 2014; the email from Holzer to WDHS sent on May 27, 2015; and the public
remarks made by Defendant Vilsack on July 15, 2015. (Doc. 13 at 18.)
These
communications, in particular defendant Vilsack’s statement, constitute final agency
actions, according to plaintiffs, because they are “clear, ‘simple,’ and ‘declarative,’ and thus
final under Seventh Circuit law,” citing Western Illinois Home Health Care. (Doc 13 at 18.)
In Western Illinois Home Health Care, the Wage and Hour Division of the Department of
6
Labor (DOL) initiated an investigation to see if the defendants were complying with the Fair
Labor Standards Act. W. Ill. Home Health Care, Inc., 150 F.3d at 660. After concluding
its investigation, the DOL sent a letter to the defendants stating:
I will be closing our investigation with no further action . . . . At a minimum,
a joint employment relationship exists in this situation. If your client fails to
pay overtime in accordance with this enforcement position it does so at its
own peril . . . . If at any time in the future your client is found to have violated
the monetary provision of the FLSA, it will be subject to such penalties.
Id. at 661. The court ruled this letter constituted final agency action because “the letter is
not at all tentative or interlocutory in nature” and because “legal consequences flow from
it, both with respect to [defendants’] obligations to their employees and with respect to
[defendants’] vulnerability to penalties should they disregard the DOL’s determination.” Id.
Plaintiffs contend that these three communications constitute final agency action
because, similar to the final agency action in First National Bank v. Comptroller,
defendants’ “unequivocal position carries ‘enormous potential liabilities’ for Wisconsin.”
(Doc. 13 at 18.) In First National Bank, the bank as trustee of a collective investment fund,
asked the Comptroller of the Currency whether its proposal to disburse properties owned
by the fund was a violation of certain regulations or, alternatively, if a waiver could be
granted. 956 F.2d 1360, 1362 (7th Cir. 1992). The Comptroller responded, informing the
bank that the proposal would violate applicable federal regulations and that enforcement
would not be waived. Id. at 1362. The court held that the Comptroller’s letter ruling
constituted final agency action because the bank requested “not advice, perhaps on a
purely hypothetical course of action, but permission to go forward with a concrete proposal
that it had already put to the fund participants.” Id. at 1364. In addition, the Comptroller’s
response did not offer a merely tentative view or request additional information before
7
making a definitive ruling, but a flat out refusal to authorize the bank to restructure its
investment fund as it wanted to do. Id.
Here, the court is not persuaded that any of defendants’ communications rise to the
level of final agency action.
Although the email to Georgia may have marked the
consummation of the agency’s decisionmaking process regarding Georgia’s program, it has
no bearing on the plaintiffs here. The email is directed to a different state regarding a
different program, and the amended complaint does not assert that the USDA took any
action against Georgia afterward. Further, the pleadings here fail to indicate that the drugtesting legislation enacted by Georgia resembles the legislation enacted by Wisconsin.
The email from Holzer to Wisconsin differs significantly from the letters in Western
Illinois Home Health Care and First National Bank. Unlike the letter in Western Illinois
Home Health Care, Holzer’s email discusses no legal consequences for Wisconsin. It did
not create or warn of any penalties Wisconsin would suffer if it passed the bill, whereas the
letter in Western Illinois Home Health Care was issued at the conclusion of a formal
investigation, set forth the legal position of the agency and identified the action that would
result in penalties. Indeed, the text of Holzer’s email indicates its lack of finality. Holzer
says that FNS “will continue to monitor” the situation and that if the legislation was
subsequently enacted into law, FNS would assess how the law interacts with federal law
then “advise the State agency appropriately.” The email was sent by Holzer before any
formal investigation of enacted statutory language occurred and reflected her expectation
that additional events would occur prior to the federal agency’s final position. It is unclear
whether the language of the enacted statute is the same as what Holzer reviewed.
Moreover, contrary to First National Bank, Holzer’s email did not reflect a definitive ruling
8
nor was it sent in response to a request from the plaintiffs for authorization to implement
Act 55.
Further, Vilsack’s public comments, apparently made to a reporter the day after the
plaintiffs filed suit, do not constitute final agency action. The comments were not made as
part of an official ruling that created legal obligations or consequences for the plaintiffs,
simply because Vilsack is the Secretary of Agriculture. See In re Murray Energy Corp., 788
F.3d 330, 335–36 (D.C. Cir. 2015) (finding that public statements about an agency’s legal
authority to issue a proposed rule did not constitute final agency action when the
statements were unconnected to a final rule or other final agency action). Although
defendants do not dispute that Vilsack’s comments reflected a general position on the issue
of testing certain FoodShare recipients for a reporter’s use, the comments were not made
or communicated directly to the defendants such as the communications in Western Illinois
Home Health Care.
Defendants maintain they could not have taken final agency action until plaintiffs
submitted an updated state plan of operation for review by FNS. Plaintiffs disagree,
arguing that 21 U.S.C. § 862b displaced 7 U.S.C. § 2014(b) and as a result “each State has
the right to drug test SNAP recipients at its sovereign option, as part of a SNAP
employment training program or otherwise, without first seeking permission from the
Secretary or justifying such testing in its SNAP plan.” (Doc. 13 at 5.)
The facts alleged lead the court to conclude that plaintiffs are unable to establish that
defendants have taken final agency action regarding this matter. Plaintiffs have taken no
steps whatsoever to implement Act 55, whether it be issuing new rules, updating a state
plan, or heading directly to implementation without plan approval by the defendants. The
9
defendants appear neither to have been asked to provide a final ruling nor to have been
forced to do so by the plaintiffs’ actions. Any possibility of future action by the defendants
is, at this time, hypothetical. Nothing appears to have barred Wisconsin from contacting
the defendants after the legislation passed and formally presenting the issue and the state’s
proposed drug-testing rules (apparently not yet developed) to defendants for a true
determination of whether they violate the federal SNAP provisions. Holzer indicated that
the state could do so. Plaintiffs ask this court to accept for ripeness—in place of a
definitive, formal determination by defendants—some preliminary thoughts on the
legislation, a determination regarding Georgia’s legislation, and general public statements
made to a reporter. But the court believes that a case or controversy requires more.
The other balancing factor to consider in determining whether this issue is fit for
judicial review is whether the issue is a purely legal question. “Where a petition involves
[a] purely legal claim[] in the context of a facial challenge to a final rule, a petition is
‘presumptively reviewable.’” Owner-Operator Indep. Drivers Ass’n v. Fed. Motor Carrier
Safety Admin., 656 F.3d 580, 586 (7th Cir. 2011) (citing Sabre, Inc. v. Dep’t of Transp., 429
F.3d 1113, 1119 (D.C. Cir. 2005)). “In light of this presumption, a petitioner need not
demonstrate individual hardship to show ripeness unless the agency identifies ‘institutional
interests favoring the postponement of review.’” Id.
Here, plaintiffs contend that the main question is a purely legal one: Is Wisconsin’s
drug-testing statute preempted under federal law? (Doc. 13 at 11.) Regardless, without
actual rules under Act 55 and more concrete or definitive statements from the defendants
in response, plaintiffs’ contentions are too speculative for a federal court to address. Act
55 states that the WDHS should promulgate rules about drug testing, and although the
10
governor issued a statement of scope regarding such rules, the plaintiffs fail to point to any
rules that Wisconsin promulgated or any other implementation of the drug-testing
requirement. Meanwhile, the defendants have issued no definitive, final opinion on the law
or its implementation. Hence, plaintiffs are asking the court to decide this case in a
vacuum, not knowing exactly how Wisconsin will implement the drug testing program and
what the defendants will find to be acceptable or unacceptable. Therefore, a decision on
the merits of this case would be advisory.
B.
Hardship to parties of withholding court consideration
The other criterion for assessing whether a case is ripe for judicial review is the
“hardship to the parties of withholding court consideration.” Abbott Labs., 387 U.S. at 148.
Hardship is assessed by whether the action has a “direct and immediate” effect on a party.
Id. at 152. However, “hardship need not take the form of an actual enforcement action; the
threat of enforcement is sufficient because the law is in force the moment it becomes
effective and a person made to live in the shadow of a law that she believes to be invalid
should not be compelled to wait and see if a remedial action is coming.” Owner-Operator,
656 F.3d at 586. “The principle at work in the hardship analysis is that a plaintiff should not
be required to face the Hobson’s choice between forgoing behavior that he believes to be
lawful and violating the challenged law at the risk of prosecution.” Smith v. Wisc. Dep’t of
Agric., Trade, & Consumer Prot., 23 F.3d 1134, 1141 (7th Cir. 1994).
Plaintiffs contend that Wisconsin “must choose between enforcing its own state law
and facing the specter of losing millions of federal dollars, or not enforcing its own state
law.” (Doc. 13 at 12) (emphasis omitted). On the other hand, defendants submit that there
is no allegation suggesting that to date defendants have taken any action that has had a
11
direct and immediate impact on plaintiffs. (Doc. 12 at 17-18.) Moreover, defendants noted
that they cannot take any action against a state based on its administration of SNAP
benefits unless the Secretary follows an administrative process that is subject to judicial
review in federal court. (Doc. 12 at 2 (citing 7 U.S.C. §§ 2020(g), 2023; 7 C.F.R. pt. 2760),
18 (citing Home Bldrs. Ass’n v. U.S. Army Corps of Eng’rs, 335 F.3d 607, 619 (7th Cir.
2003)).) Further, 7 U.S.C. § 2020(g) provides that if the Secretary (i.e., Vilsack) determines
that the state is not complying with federal SNAP requirements, he must inform the state
and allow the state a period of time for correction of the failure. The amended complaint
fails to allege that Wisconsin received any such notice.
In Metropolitan Milwaukee Ass’n of Commerce v. Milwaukee County, the county
enacted an ordinance establishing requirements for contractors doing business in the
county. 325 F.3d 879, 880 (7th Cir. 2003). MMAC sued the county and sought preenforcement review of the ordinance, alleging that the ordinance was preempted by federal
statute and violated the first amendment. Id. The court held that pre-enforcement review
was proper and a case or controversy existed. Id. at 883. It ruled that to establish hardship
MMAC had to demonstrate that “enforcement is certain, only delayed” or that “even though
enforcement is not certain, the mere threat of future enforcement has a present concrete
effect on MMAC’s day-to-day affairs and irremediably adverse consequences would flow
from a latter challenge.” Id. at 882 (internal quotes omitted).
Here, enforcement is not certain because defendants have not taken a final position
on the legality of Wisconsin’s law. It is speculative whether FNS will disagree with plaintiff’s
assertion that 21 U.S.C.A. § 862b preempts 7 C.F.R. § 273.2(a). In addition, the potential
of future enforcement does not create irremediably adverse consequences for the plaintiffs.
12
The present case resembles Toilet Goods Ass’n v. Gardner, in which plaintiffs
sought pre-enforcement review of an administrative regulation. The court determined that
the issue was not ripe, in part because “no irremediable adverse consequences flow[ed]
from requiring a later challenge to this regulation.” A “refusal to admit an inspector here
would at most lead only to a suspension of certification services to the particular party, a
determination that can then be promptly challenged through an administrative procedure,
which in turn is reviewable by a court.” 387 U.S. 158, 164-65 (1967). The court found that
such a review would provide “an adequate forum for testing the regulation in a concrete
situation.” Id. at 165. Additionally, considering all of the factors set forth in Abbott
Laboratories–the sister case to Toilet Goods, decided on the same day–the court stated
that “we believe that judicial appraisal of these factors is likely to stand on a much surer
footing in the context of a specific application of this regulation than could be the case in
the framework of the generalized challenge made here.” Id. at 164.
Similarly, this court believes the current case requires surer footing. It is unclear
how Wisconsin will implement the drug-testing program and what, if any, additional issues
may or may not arise from it. Here, fewer factors favoring judicial resolution exist than
there were in Toilet Goods. No final agency action has occurred. And, as in Toilet Goods,
an administrative procedure exists that would solidify the issues in question and create a
record that eliminates the uncertainty and speculation that surrounds this matter as it
currently stands.
CONCLUSION
Because the issue presented is not ripe, no case or controversy exists and the court
lacks subject matter jurisdiction. It follows that this matter must be dismissed under Rule
13
12(b)(1), and there is no need to address the defendants’ additional arguments.
Consequently,
IT IS ORDERED that defendants’ motion to dismiss (Doc. 11) is granted and this
action is dismissed for lack of subject matter jurisdiction.
Dated at Milwaukee, Wisconsin, this 28th day of September, 2016.
BY THE COURT
/s/ C.N. Clevert, Jr.
C.N. CLEVERT, JR.
U.S. DISTRICT JUDGE
14
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?