2013--06-21 (0129) plaintiffs' reply in support of motion for summary judgment

7/27/2019 2013--06-21 (0129) Plaintiffs' Reply in Support of Motion for Summary Judgment

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PLS.REPLYINSUPP.OFMOT.FORSUMM.J

MARK D. ROSENBAUM, SBN [email protected] FOUNDATION OF SOUTHERNCALIFORNIA1313 W. 8th StreetLos Angeles, CA 90017

T: (213) 977-5220, F: (213) 417-2220

RONALD L. OLSON, SBN [email protected], TOLLES & OLSON LLP355 South Grand Avenue, 35th Fl,Los Angeles CA 90071-1560T: (213) 683-9100, F: (213) 683-5111

JOHN C. ULIN, SBN [email protected]

ARNOLD & PORTER, LLP777 South Figueroa StreetLos Angeles, CA 90017T: (213) 243-4228, F: (213) 243-4199

Attorneys for Plaintiffs(Additional counsel listed on next page)

LAURENCE H. TRIBE, SBN [email protected] 420, 1575 Massachusetts Ave.Cambridge, MA 02138T: (617) 495-1767

GARY L. BLASI, SBN [email protected] of Law Emeritus

UCLA SCHOOL OF LAW*405 Hilgard AvenueLos Angeles, California 90024T: (310) 206-9431, F: (310) 206-1234

AMOS E. HARTSTON, SBN [email protected] CITY LAW CENTER1309 East Seventh StreetLos Angeles, CA 90021T: (213) 891-2880, F: (213) 891-2888

*For identification purposes only

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

GREGORY VALENTINI, et al.,

Plaintiffs,

v.ERIC SHINSEKI, et al.,

Defendants.

Case No. CV-11-04846-SJO (MRW)x

The Honorable S. James Otero

PLAINTIFFS REPLY IN SUPPORTOF MOTION FOR SUMMARYJUDGMENT

[NO HEARING DATE]

Case 2:11-cv-04846-SJO-MRW Document 129 Filed 06/21/13 Page 1 of 7 Page ID #:3881


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- 2 -PLS.REPLYINSUPP.OFMOT.FORSUMM.J.

Additional Counsel

PETER ELIASBERG, SBN [email protected] B. SAPP, SBN [email protected]

ACLU FOUNDATION OF SOUTHERNCALIFORNIA1313 W. 8th StreetLos Angeles, CA 90017T: (213) 977-5220, F: (213) 417-2220

ADAM MURRAY, SBN [email protected] A. TYNER, SBN [email protected]

ELIZABETH HAMAN KUGLER,SBN [email protected] CITY LAW CENTER1309 East Seventh StreetLos Angeles, CA 90021T: (213) 891-2880, F: (213) 891-2888

ERIC SHAPLAND, SBN [email protected] J. FINSTEN, SBN 234999

[email protected] K. POORMAN, SBN [email protected] MARTINEZ, SBN 274210

[email protected] & PORTER, LLP777 South Figueroa StreetLos Angeles, CA 90017T: (213) 243-4228, F: (213) 243-4199

JONATHAN [email protected] Hac Vice

MASSEY & GAIL LLP1325 G St. NW, Suite 500Washington, D.C. 20005T: (202) 652-4511, F: (312) 379-0467

LEONARD GAIL

[email protected] Hac ViceMassey & Gail LLP50 East Washington St., Suite 400Chicago, IL 60602T: (312) 283-1590, F: (312) 379-0467

BRADLEY S. PHILLIPS, SBN 85263

[email protected] TAYLOR, SBN [email protected], TOLLES & OLSON LLP355 South Grand Avenue, 35th Fl,Los Angeles, CA 90071-1560T: (213) 683-9100, F: (213) 683-5111



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Defendants Opposition to Plaintiffs Motion for Summary Judgment (Dkt. No. 127)

(Def. Opp.) acknowledges candidly, for the first time, that the Department of Veterans

Affairs (DVA) does not recognize any limits on the scope of its authority to dispose of

property given its power to share health-care resources under 38 U.S.C. 8151-53.

According to DVA, when Congress expressly defined the term health-care resource in 38

U.S.C. 8152(1), Congress really meant any real property under VHAs control. Def.

Opp. at 8 (emphasis added). DVAs acknowledgement that it reads the statute to authorize

any agreement with any entity for any purposewhich is notably absent from its reports to

Congressfinally explains how DVA views movie studio storage facilities, a private school

athletic complex, and a hotel laundry service (among other things) as health-care resources.

DVAs entry into the challenged leases, however, directly contradicts the clear,

unambiguous definition in the health-care resource sharing statute and ignores the broader

statutory context in which Congress allowed for the use and disposition of DVA property. In

its Opposition, DVA fails to acknowledge, much less undermine, Plaintiffs detailed

explanations of why the statute is unambiguous. DVA also fails to meaningfully address

Plaintiffs argument that Congress separately provided for the leasing of real property under

DVAs control when it enacted the enhanced use lease (EUL) authority, 38 U.S.C. 8161-

69, which explicitly authorized DVA to encumber its property with purely revenue-generating

leases unrelated to the provision of health care, subject to various notice and accountability

requirements. The very existence of a limited EUL authority, against the backdrop of the

clear definition of health-care resource in 8152(1), renders DVAs position untenable.1

1 DVA inexplicably continues to dispute the Courts ruling that Plaintiffs have standing topursue their APA claim based on a concrete interest in how the WLA Campus is used.Dkt. No. 70 at 12. DVA concedes, however, that access to undeveloped DVA land can be

therapeutic for veterans and that currently underutilized DVA land can be developed toserve veterans. Def. Opp. at 9 & n.13. It is thus undisputed, well documented in theRecord, and inescapable as a matter of logic that the encumbered land, totaling nearly aquarter of the WLA Campus, is not available for the benefit of veterans, see Pls. Mot. forSumm. J. at 7-8 (Dkt. No. 124) (Pls. Mot.) (discussing AR 191-1700), so Plaintiffs havesuffered injury. Likewise, Plaintiffs are not selectively challenging certain leases becauseof policy preferences. Def. Opp. 1, 4-5 & n.7. Plaintiffs have no obligation to challengeall leases as void. In any event, Plaintiffs did not challenge certain agreements because theyrelate to health-care resources, as defined by Congress. See, e.g., AR 460, 586 (statingthat Purpose of Salvation Army agreements is [t]o provide space for housing and

(Footnote Contd on Following Page)



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A. The Challenged Leases Exceed Unambiguous Limits on DVAs StatutoryAuthority

DVA focuses almost exclusively on the purported reasonableness of its reading of the

statute. See Def. Opp. at 8-17. DVA thus continues to ignore what the Supreme Court has

repeatedly stated is the necessary first step underChevron U.S.A. Inc. v. Natural Resources

Defense Council, 467 U.S. 837, 842-43 104 S. Ct. 2778, 81 L. Ed. 2d 694 (1984): [i]f the

intent of Congress is clear, that is the end of the matter; for the court, as well as the agency,

must give effect to the unambiguously expressed intent of Congress. See also City of

Arlington v. F.C.C., 569 U.S. __, 133 S. Ct. 1863, 1874-75, 185 L. Ed. 2d 941 (2013)

(Where Congress has established a clear line, the agency cannot go beyond it . . . .).

1. The Statutory Language Is Clear: Health-Care Resource DoesNot Mean Any Real Property Under VHAs Control

The sum total of DVAs treatment of statutory ambiguity is in footnotes 8 and 9 of its

Opposition, see Def. Opp. at 6 n.8 & n.9, and consists of conclusory assertions that ignore

Plaintiffs detailed analysis of the statute that explicitly answer the questions that DVA poses.

Plaintiffs explained at length that health-care modifies both support and administrative

resource in 8152(1) and articulated how health-care support and health-care

administrative resource differ from the preceding terms in the definition. Pls. Mot. at 11-13;

contra Def. Opp. at 6 n.9. Accounting services, for example, are not hospital care or

medical services, as defined, but are an administrative resource and would therefore meet

the definition ifthey are used in the context of health-care related activities. Plaintiffs thus

explained that whether a particular sharing agreement is authorized by statute may depend on

how the property is used and who uses it, including specifically explaining that reading the

statute to cover any space owned by DVA is inconsistent with the phrase medical

equipment or space in 38 U.S.C. 8153(3)(A) & (B)(i) (emphasis added). See Pls. Opp. to

(Footnote Contd From Previous Page)

services to veterans transitioning from mental health and substance abuse problems toappropriate housing and services).



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Defs. Mot. for Summ. J. at 6-7 (Dkt. No. 125) (Pls. Opp.); Pls. Mot. at 12 n.5; contra Defs.

Opp. at 6 n.8. The statutory language is clear: the health-care resource sharing authority is a

limited exception to general restrictions on DVAs authority to encumber its land that merely

permits DVA to secure or effectively utilize health-care resources, not broadly to dispose

of any unused land.

DVAs approach is flawed precisely because it writes the phrase health-care

resource out of the statute or, at bottom, treats it as a synonym for anything DVA owns or

does.2

The plain language of the statuteincluding adjectives like medical and health-

care used throughout 8151-53does not (and cannot) entail the unfettered grant of

authority DVA claims. See Pls. Mot. at 11-13. Instead of grappling with these arguments

or the statutory text, DVA baldly asserts, but fails to explain how, the statute is ambiguous.

Given its failure to establish ambiguity, the balance of DVAs argument about the purported

reasonableness of its interpretation of the statute is beside the point.

2. DVAs Use of the Health-Care Resource Sharing AuthorityRenders Other Provisions Superfluous

The structure of Part VI of Title 38 of the U. S. Code, entitled Acquisition and

Disposition of Property, further confirms that, in enacting and amending the health-care

resource sharing authority, Congress intended to treat DVAs health-care resources

differently from other DVA resources.3 Unlike the health-care resource sharing authority, the

EUL statute, 38 U.S.C. 8161-69, separately authorizes the Secretary to enter into leases

with respect to real property that is under [his] jurisdiction or control. 38 U.S.C.

8162(a)(1) (emphasis added); compare with 38 U.S.C. 8151-53 (limiting use to health-

care resources). The EUL statute also explicitly authorized the Secretary to enter into purely

2 Plaintiffs have not mischaracterized DVAs interpretation of the statute, see Def. Opp. at11 n.14, but rather have merely stated the inescapable consequence of the interpretation thatDVA has advanced.3 DVAs resort to legislative history, see Def. Opp. at 9-10, does not support its position. Ifanything, that history reinforces that Congress was focused on medical care and did notintend to give DVA unfettered authority to enter into any agreement with any entity for any

purpose. See Pls. Mot. at 15-16.



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revenue-generating leases unrelated to provision of health care to veterans, but imposed

stringent procedural requirements for such leases, requirements that are notably absent from

the health-care resource sharing authority. See Pls. Mot. 13-15; Pls. Opp. at 5.4

DVA ignores both the existence of the EUL statute and that its proffered

interpretation of medical space as covering all VHA property renders the EUL authority

superfluous.5 DVAs only response to this problem, see Def. Opp. at 14 n.16, is a curious

citation to Connecticut National Bank v. Germain, 503 U.S. 249, 253, 112 S. Ct. 1146, 117

L. Ed. 2d 391 (1992) (observing that 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). Sections 8151-53 and

8161-69 provide overlapping authority to DVA, however, only under DVAs tortured

interpretation of 8151-53, and the redundancy that DVAs interpretation produces is

positive[ly] repugnan[t] because it would, in fact, render the EUL authority superfluous.

B. DVAs Impermissible Interpretation Is Not Entitled To Deference orRespect

The statute is unambiguous, so DVAs arguments about the reasonableness of its

interpretation are irrelevant. Even assuming, however, that the statute is ambiguous, DVAs

interpretation does not merit any level of deference or respect. As even DVA concedes, see

Def. Opp. at 16, DVAs interpretation is expressed only in agency policy manuals. It

therefore does not have the force and effect of law and is not entitled to deference under

Chevron. See Pls. Opp. at 13-15. Nor does DVAs interpretation merit the lesser respect

sometimes accorded informal agency interpretations. See id. at 15-17. The internal agency

documents in the Record contain nothing more than assertions, devoid of any reasoned

4 DVA asserts, without explanation, that leases somehow differ from sharing agreements.See Def. Opp. at 11 n.14. But the Record establishes that the challenged agreementsconcern property interests such as tenancy, rent, and exclusive occupancy. So thedistinction, to the extent one exists, is immaterial.5 This is particularly perplexing given DVAs reliance on the 2008 memorandum (AR 147-151). See Def. Opp. at 8 (citing AR 149). That document clearly grasps the impact of theEUL authority, or more directly the unavailability of the EUL authority at the WLACampus. See generally AR 147-148.



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analysis or basis in the statutory text. The 2008 memorandum (AR 147-151) upon which

DVA relies notably fails to even mention health-care resources or explain its conclusion

that the statute authorizes what the memorandum terms use of space agreements.

Finally, the Record confirms that DVA did not appraise Congress of DVAs

interpretation of the statute, at least not the interpretation articulated in DVAs Opposition.

To the contrary, the report that DVA quotes in its Reply (presumably as the best support for

its argument that Congress was on notice) indicates that DVA leases underutilized land under

the sharing authority only for medical purposes. See Def. Reply ISO Mot. for Summ. J. at 4

(Dkt. No. 128) (quoting AR 116.029 (stating DVA may share underutilized resources with

other community entities and provide resources topatients referred by the sharing partner

(emphasis added))). Likewise, DVA consistently used the term medical space, see, e.g.,

AR 115, 116.30, 116.45, 116.58, 116.71-72, 116.85-86, 116.100, 116.111-12, 116.124-25) or

specialized space, see AR 101, in its reports to Congress, with no indication that DVA

actually views those terms to mean any and all space. Although the disclosures that DVA

says it made would not be enough to establish congressional acquiescence, its failure to

candidly advise Congress about its use of the statute underscores that its interpretation is

deeply flawed.

C. ConclusionPlaintiffs respectfully request the Court GRANT their motion, invalidate the

challenged leases, and enjoin future abuses of the health-care resource sharing authority at the

WLA Campus.

Dated: June 21, 2013. ARNOLD & PORTER LLP

By: /s/ John C. Ulin

John C. UlinAttorneys for Plaintiffs


2013--06-21 (0129) plaintiffs' reply in support of motion for summary judgment

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