valentini - defs. msj reply

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Case No. 11-cv-04846 Reply Memorandum In Support Of Defendants Motion for Summary Judgment

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UNITED STATES DISTRICT COURTCENTRAL DISTRICT OF CALIFORNIA

GREGORY VALENTINI, et al.,

Plaintiffs,

vs.

ERIC SHINSEKI, et al.,

Defendants.

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DEFENDANTS REPLYMEMORANDUM IN SUPPORT OFTHEIR MOTION FOR SUMMARYJUDGMENT

[NO HEARING DATE SET][Before the Honorable S. James Otero]

STUART F. DELERYActing Assistant Attorney General

ANDRE BIROTTE JR.

United States AttorneyLEON W. WEIDMANChief, Civil DivisionALARICE M. MEDRANO(SBN 166730)Assistant United States AttorneyRoom 7516 Federal Building300 North Los Angeles StreetLos Angeles, CA 90012Telephone: (213) 894-0460Facsimile: (213) 894-7819

E-mail: [email protected]

JUDRY L. SUBARAssistant Branch DirectorELISABETH LAYTONSenior Counsel

KAREN S. BLOOMTrial AttorneyU.S. Department of JusticeCivil DivisionFederal Programs Branch20 Massachusetts Ave., N.W.Washington, DC 20001T: (202) 514-3183; F: (202) 616-8470Email: [email protected]

Attorneys for Defendants

Case 2:11-cv-04846-SJO-MRW Document 128 Filed 06/12/13 Page 1 of 7 Page ID #:3874


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Case No. 11-cv-04846 Memorandum in Opposition to Plaintiffs Motion for Summary Judgment Page 1

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Plaintiffs have defined the focus of the one claim remaining in this case as

the meaning of the term health-care resources as used in 38 U.S.C. 8151-

8153. In other words, although Plaintiffs initially alleged that United States

Department of Veterans Affairs (VA) decisions to enter into those land-use

agreements at VAs West Los Angeles (WLA) campus that are included in the

Administrative Record (AR ) (ECF No. 96, 98, 112), all violated the

Administrative Procedure Act, 5 U.S.C. 706(2)(A) and (C), Plaintiffs are now

abandoning that claim in part. Specifically, Plaintiffs have moved for summary

judgment based solely on their allegation that VA exceeded its statutory authority

by interpreting health-care resources to include property belonging to the WLA

medical center run by the Veterans Health Administration (VHA). See Pls.

Oppn to Defs. Mem. Summ. J., 1 May 10, 2013, ECF No. 125(PODMSJ). For

the reasons set forth below and in Defendants Memorandum In Support Of

Summary Judgment (DMSJ) and Opposition To Plaintiffs Motion for Summary

Judgment (DOPMSJ),1

summary judgment should be granted in Defendants

favor.2

1

Defendants incorporate by reference all arguments made in their motion forsummary judgment and opposition to plaintiffs motion for summary judgment.

See Defs. Mem. Summ. J., April 10, 2013, ECF No. 116 (DMSJ) and Defs.

Oppn to Pls. Mot. for Summ. J., June 12, 2013, ECF No. 127 (DOPMSJ).

2It appears quite clear from their papers that Plaintiffs are not raising any other

legal arguments. Plaintiffs choice to challenge some but not all of the ESAs

encompassed in the AR, even though all of these ESAs reflect VAs challenged

interpretation of health-care resources, suggests that Plaintiffs might also want

this Court to second-guess the policy decisions of the VA Secretary as to which

agreements are in the best interest of the VA medical program. See DOPMSJ 13-17. Of course, the Court would lack jurisdiction to do so. See DMSJ 3-11.

Indeed, Plaintiffs appear to acknowledge that these individual decisions about

which agreements are in the best interest VAs medical program are appropriately

left to the Secretarys discretion. See PODMSJ 8 (the uncontested proposition

that the Secretary has discretion to decide whether entering into a particular health-

care resources sharing agreement is in the best interests of the program).



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I. VA HAS ACTED WITHIN ITS STATUTORY AUTHORITY ININTERPRETING HEALTH-CARE RESOURCES, WHETHER

THAT INTERPRETATION IS TREATED WITH DEFERENCE OR

ONLY WITH RESPECTCentral to the issue now before the Court is the meaning of the term health-

care resource, as used in the statute giving VA authority to share such resources.

38 U.S.C. 8151 - 8153. The scope of the term health-care resources is

described in the statute as encompassing health-care support or administrative

resource[s], 38 U.S.C. 8152(1); see DOPMSJ 13-17, a phrase that itself is

both undefined in the statute and somewhat ambiguous. Therefore, Plaintiffs

APA claim cannot be resolved under what has come to be known as step one of

Chevron U.S.A., Inc. v. Natl Res. Def. Council, 467 U.S. 837, 842-44 (1984),

under which unambiguous statutory terms control. Instead, the Court should look

to VAs interpretation of the ESA statute, in order to determine the scope of VAs

own authority under 38 U.S.C. 8151-8153. The Supreme Court has recognized

that agencies must be accorded Chevron step two deference,see 467 U.S. at 842-

44 (upholding agency interpretation of ambiguity on statute where agency

construction of statute is permissible), in interpreting the scope of their own

authority as in other aspects of interpreting statutory ambiguities. See City of

Arlington, Tex. FCC, -- S.Ct. --, 2013 WL 2149789 (May 20, 2013) at *5

(describing Chevron step two, but not referring to it in those terms). Here, VA

reasonably interpreted the term health-care resources with reference to the

totality of the resources available to VHA, to meet the health-care and related

needs of Veterans on th approximately 388 acre WLA campus. See DOPMSJ 13-

17. While VA did not publicize this interpretation either through notice-and-

comment rulemaking, or by a decision reached in an adjudication, even Plaintiffs

acknowledge that VA was not required to engage in either of these processes.

POMSJ 2. As the Government has explained, VA may nevertheless be entitled to



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Chevron deference underBarnhart v. Walton, 535 U.S. 212, 222 (2002), which

held that the degree of deference to an agency depends upon factors such as: the

interstitial nature of the legal question, the related expertise of the Agency, the

importance of the question to administration of the statute, the complexity of [the]

administration, and the careful consideration the Agency has given the question

over a long period of time. See DMSJ 15-16, DOPMSJ 13-16. But even if VA is

afforded only the lesser respect sometimes afforded an agencys internal

guidance documents,see United States v. Mead, 533 U.S. 218, 228 (2001);

Skidmore v. Swift Co., 323 U.S. 134, 140 (1944), VAs interpretation should be

upheld as reasonable for the reasons VA has explained. See DMSJ 12-23;

DOPMSJ 13-17. Even if Plaintiffs had offered a coherent alternative interpretation

of health-care resources, which they have not, the Court must defer to VAs

interpretation if it is permissible under the statute, even if the Court does not

believe the agencys interpretation to be the only or best possible interpretation.

Holder v. Martinez Gutierrez, 132 S. Ct. 2011, 2017 (2012);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).

II. CONGRESSIONAL ACQUIESCENCE IN VAS STATUTORYINTERPRETATION FURTHER SUPPORTS VA

Congressional awareness of an agencys longstanding interpretations

coupled with the fact that it has not overruled them is at least some evidence of

the reasonableness of that construction, particularly where the administrative

construction has been brought to Congress attention. United States v. RiversideBayview Homes, Inc., 474 U.S. 121, 137 (1985). This rule applies here, and

supports VAs position.3

3VA is not making a broader argument about congressional acquiescence than this.



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VA has consistently, and candidly, informed Congress annually about its use

of its enhanced sharing authority (ESA), pursuant to 38 U.S.C. 8151-8153, and

decisions to enter into a variety of agreements each year. See AR 90 - 139.

Although these reports are by nature general, since they summarize in the

aggregate all sorts of ESAs that VA has entered at VA medical facilities

nationwide, VAs annual reports to Congress show that the agency has put

Congress on notice that it understands generating revenue to be one of the

objectives of using the ESA authority. See, e.g. AR 116.008 (increasing reliance

of VISNs and VAMCs to purchase health care resources and to generate revenue

by selling services through the health care resources sharing authority). In

addition, VA has put Congress on notice of the ways in which it understands its

sharing authority to have expanded since it was amended in 1996. See, e.g., AR

116.029 (increasingly, VA facilities are establishing sharing agreements that

creatively and fruitfully generate revenue by providing services to sharing

partners. VA facilities that have particular resources that are not fully utilized for

the care of veterans may share these resources with other community entities and

provide resources to patients referred by the sharing partner.). Further, VA has

made clear to Congress that the agency understood health-care resource to

encompass any VHA-controlled (health-care facility) property (see, e.g., AR

116.005); and indicated that some ESAs made underutilized VHA facilities

available to the community. See, e.g., AR 116.005. Thus, VA (and the General

Accountability Office, for that matter) has made Congress aware, since at least

2009, that VA has used its health-care sharing authority under 38 U.S.C. 8151-

53, to provide the use of VHA space (including parking, recreational facilities,and vacant land) and that VA has used ESAs to generate financial benefits.

4

4Indeed, members of U.S. House of Representatives Committee on Veterans

Affairs indicated some degree of awareness of at least some of the ESAs at issue.

For example, Veterans Affairs Committee members asked VA detailed questions

concerning the Brentwood School ESA in correspondence which reflect detailed



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DMSJ 19 n. 28-29 (quotation marks omitted). If members of the Congressional

committees (particularly those overseeing VA) had been concerned about these

references to what Plaintiffs term commercial leases (some of which are

anything but commercial,5 and none of which are leases) being entered pursuant to

VAs enhanced sharing authority, Congress could have amended the statute or

otherwise precluded VA from continuing to enter such agreements. The fact that

VAs statute was not amended to preclude expressly what Plaintiffs say is

unlawful supports the proposition that VAs reading of the statute is permissible.

Accordingly, summary judgment should be entered for Defendants.

Respectfully submitted,

Dated: June 12, 2013 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 AttorneyJUDRY L. SUBAR

Assistant Branch Director

By: /s/ Elisabeth Layton

ELISABETH LAYTON

Senior Counsel

KAREN S. BLOOM

knowledge by Committee members about the annual revenue VA expected to

receive from this private school as part of an agreement allowing the school tobuild and operate athletic facilities on the WLA campus. See AR 246.1-246.3;

246.5; 246.18-246.19; 246.22-242.23.

5See, e.g., AR186-87 (VAs Master Plan for WLA campus); AR 824-860 (ESA for

Veterans Memorial Park and healing gardens); AR 877-916 (agreement with

soccer clubs for non-exclusive use of MacArthur field).



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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: [email protected]

Attorneys for Defendants


valentini - defs. msj reply

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