valentini v shinseki: pls msj

7/30/2019 Valentini v Shinseki: Pls MSJ

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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] LAW SCHOOL*Hauser 420, 1575 Massachusetts Ave.Cambridge, MA 02138T: (617) 495-1767

GARY L. BLASI, SBN [email protected]

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 NOTICE OFMOTION AND MOTION FORSUMMARY JUDGMENT;MEMORANDUM OF POINTS ANDAUTHORITIES IN SUPPORTTHEREOF

NO HEARING DATE

Case 2:11-cv-04846-SJO-MRW Document 124 Filed 05/10/13 Page 1 of 29 Page ID #:3792


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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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PLS. NOTICE OF MOT. AND MOT. FOR SUMM. J.

NOTICE OF MOTION AND MOTION

TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:

PLEASE TAKE NOTICE that pursuant to the Courts February 13, 2013 Order

(Dkt. No. 111), Plaintiffs, by and through their undersigned counsel, hereby move

this Court for summary judgment pursuant to Federal Rule of Civil Procedure 56(a).

This Motion is based upon this Notice of Motion and Motion, the attached

Memorandum of Points and Authorities, the Administrative Record, the prior Orders

of this Court, the complete files and records in this action, and such other written or

oral arguments that may be presented to the Court.

This Motion is made following a conference of counsel held pursuant to Local

Rule 7-3, which took place on March 22 and April 25, 2013.

Plaintiffs respectfully request the opportunity for oral argument once the

briefing on the cross-motions for summary judgment is completed.

Dated: May 10, 2013. ARNOLD & PORTER LLP

By: /s/ John C. UlinJohn C. UlinAttorneys for Plaintiffs



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TABLE OF CONTENTS

Page

I. INTRODUCTION ............................................................................................... 1II. BACKGROUND ................................................................................................. 2

A. Statutory Framework Governing the Challenged Leases ......................... 21. Health-Care Resource Sharing Authority ....................................... 32. Enhanced Use Lease Authority ...................................................... 43. Restrictions on Disposition of the WLA Campus .......................... 5

B. The Administrative Record ....................................................................... 5C. Plaintiffs APA Claim ............................................................................... 8

III. LEGAL STANDARD ......................................................................................... 8IV. ARGUMENT ....................................................................................................... 9

A. The Challenged Leases Are Void Because They ExceedUnambiguous Limits on DVAs Power To Share Health-CareResources ................................................................................................ 101. Congress Has Unambiguously Defined the Phrase

Health-Care Resource ............................................................... 112. Reading 8153 to Authorize the Challenged Leases

Would Be Inconsistent with the Broader StatutoryStructure Regulating Use of DVA Property ................................. 13

3. Legislative History Confirms that the Challenged LeasesAre Contrary to Congresss Intent ................................................ 14

4. The Challenged Leases Exceed DVAs Authority toShare Health-Care Resources ....................................................... 16

B. Even Assuming the ESA Statute is Ambiguous, DVAsDecisions Are Not Due Any Deference .................................................. 21

V. CONCLUSION ................................................................................................. 22



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TABLE OF AUTHORITIES

Page(s)FEDERAL CASES

Boise Cascade Corp. v. U.S. E.P.A.,942 F.2d 1427 (9th Cir. 1991) ........................................................................... 15

Chevron U.S.A. Inc. v. Natural Resources Defense Council,467 U.S. 837, 104 S. Ct. 2778, 81 L. Ed. 2d 694 (1984) ........................ 9, 10, 21

United States v. Lacy,119 F.3d 742 (9th Cir.1997) .............................................................................. 12

United States v. Mead Corp.,533 U.S. 218, 121 S. Ct. 2164, 150 L. Ed. 2d 292 (2001) ............................ 9, 21

United States v. Wahid,614 F.3d 1009 (9th Cir. 2010) ........................................................................... 14

Whitman v. Am. Trucking Assn,531 U.S. 457, 121 S. Ct. 903, 149 L. Ed. 2d 1 (2001) ...................................... 22

Wilderness Socy v. U.S. Fish & Wildlife Serv.,353 F.3d 1051 (9th Cir. 2003) (en banc),amended on rehg en banc on other grounds,360 F.3d 1374 (9th Cir. 2004) ....................................................... 8, 9, 10, 21, 22

Wilson v. C.I.R.,705 F.3d 980 (9th Cir. 2013) ....................................................................... 11, 15

STATUTES,RULES ANDREGULATIONS

38 C.F.R. 17.142 ......................................................................................................... 6

5 U.S.C. 701-708 ...................................................................................................... 8

5 U.S.C. 706(2)(A)............................................................................................... 8, 9, 10

5 U.S.C. 706(2)(C) ................................................................................................... 8, 10

38 U.S.C. 1701(5) ................................................................................................. 3, 1238 U.S.C. 1701(6) ................................................................................................. 3, 12

38 U.S.C. 1782 ...................................................................................................... 3, 12

38 U.S.C. 1783 ...................................................................................................... 3, 12

38 U.S.C. 5022 .......................................................................................................... 21

38 U.S.C. 8122 .......................................................................................................... 21



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38 U.S.C. 8151 ...................................................................................................... 3, 11

38 U.S.C. 8151-8153 .......................................................................................passim

38 U.S.C. 8152 ............................................................................................................ 3

38 U.S.C. 8152(1) ......................................................................................... 11, 12, 13

38 U.S.C. 8153 ..........................................................................4, 6, 10, 13, 14, 15, 21

38 U.S.C. 8153(a) ..................................................................................................... 12

38 U.S.C. 8153(a)(1) ................................................................................................... 4

38 U.S.C. 8153(a)(3)(A) ........................................................................................... 12

38 U.S.C. 8153(a)(3)(B)(ii) ...................................................................................... 12

38 U.S.C. 8161-69 .............................................................................................. 2, 15

38 U.S.C. 8162 ............................................................................................................ 5

38 U.S.C. 8162(a)(2) ................................................................................................... 5

38 U.S.C. 8162(a)(2)(i)-(ii) ......................................................................................... 4

38 U.S.C. 8162(a)(2)(B) ................................................................................. 4, 13, 15

38 U.S.C. 8162(c)(1) ................................................................................................... 2

38 U.S.C. 8163 ............................................................................................................ 5

38 U.S.C. 8165(a)(1) ................................................................................................... 4

Consolidated Appropriations Act, 2008,Pub L. No. 110-161, 224(c), 121 Stat. 2272 (2007) ................................... 5, 15

Honoring Americas Veterans and Caringfor Camp LeJeune Families Act of 2012(Pub. L. No. 112-154, 126 Stat. 1165 (2012) ................................................ 5, 15

Local Rule 7-3 ................................................................................................................ 8

Priority VA Health Care For Persian Gulf Veterans,Pub. L. No. 103-210, 3(a), 107 Stat. 2497 (1993) .......................................... 16

Title 38 of the U.S. Code ................................................................................... 2, 14, 15

Veterans Millennium Health Care and Benefits Act,Pub. L. No. 106-117, Title II, 208(a), (b), 113 Stat. 1567 (1999)(former 38 U.S.C. 8162(a)(2)(A)(i)-(iii), repealed 2012) .......................... 4, 13

Veterans Benefits Programs Improvement Act of 1991,Pub. L. No. 102-86, 401(a), 105 Stat. 417 (1991) ............................................ 5



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OTHERAUTHORITIES

S. Rep. 104-372 (1996) ................................................................................................ 16



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MEM.OFP.&A.INSUPP.OFPLS.MOT.FORSUMM.J.

MEMORANDUM OF POINTS AND AUTHORITIES

I. INTRODUCTIONCongress granted the Department of Veterans Affairs (DVA) authority to

enter into agreements to share health-care resources with third parties pursuant to 38

U.S.C. 8151-53. Congress made crystal clear in both its statement of congressional

purpose and the statutory definitions that this authority to enter into health-care

resource sharing agreements extends only to services, equipment, and space related

directly to health care for veterans. DVA has, however, elected to ignore Congresss

intent and to instead treat these provisions as a blanket grant of authority to lease its

property to any entity for any purpose, including ones that have nothing at all to do

with providing health care to veterans. DVAs approach is simple: if it calls an

agreement a health-care resource sharing agreement, it is one, regardless of the terms

or purpose of the agreement. Examples of these mis-titled health-care resource

sharing agreements include leases that allow significant portions of DVAs West Los

Angeles Campus (WLA Campus) to be used as:

a private schools athletic complex;

a luxury hotels laundry service; a movie studios set storage facility; and a baseball stadium for UCLA.

These uses deny veterans access to the land and prevent DVA from using the land for

purposes that benefit veterans. That, of course, is precisely what Congress sought to

avoid by carefully circumscribing DVAs authority.

DVAs use of the sharing authority in this manner is contrary to the plain

meaning of the health-care resource sharing statute. If permitted, moreover, it would

render obsolete Congresss separate grant to DVA of Enhanced Use Lease (EUL)

authority, which expressly empowered the agency to lease its property to third parties

for commercial purposes unrelated to services for veterans if the revenue generated wil

improve veteran services. Indeed, DVAs use of its sharing authority at the WLA



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Campus makes a mockery of the comprehensive statutory framework Congress enacted

to regulate use of DVA land: if Congress had intended the health-care resource sharing

statute to authorize DVA to lease its property in whatever manner DVA saw fit, the

numerous substantive and procedural limitations on DVAs authority to lease its

property found throughout Title 38 of the U.S. Code would be meaningless and

superfluous.

This Court was correct when it stated that the DVAs land-use agreements

entered into pursuant to ESAs that do not provide for the sharing of health-care

resources were unauthorized and resulted in lost access to space and opportunities

that benefit veterans on the WLA Campus. March 16, 2012 Order Granting in Part

and Denying in Part Defendants Motion to Dismiss at 11 (Dkt. No. 70) (March 16

Order). Plaintiffs now ask the Court to enter summary judgment that DVAs

decisions to enter into commercial land deals on the WLA Campus were made in

excess of statutory authority.

II. BACKGROUNDA. Statutory Framework Governing the Challenged LeasesIn Title 38 of the U.S. Code, Congress specifies the manner in which DVA

may operate and dispose of property within its control. Congress authorizes three

principal types of agreements through which DVA may use or dispose of its

properties: (1) health-care resource sharing agreements (referred to by DVA as

Enhanced Sharing Agreements ESAs), 38 U.S.C. 8151-53; (2) EULs, 38 U.S.C.

8161-69; and (3) short-term outleases (which are not at issue in this case). Thus,

Congress expressly provided that health-care resource sharing agreements and EULs

are differenttypes of agreements. Additionally, Congress has specifically limited

DVAs power to operate and dispose of the WLA Campus by expressly barring the

use of EULs on that property. See id. 8162(c)(1).



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1. Health-Care Resource Sharing AuthorityThe current scope of DVAs sharing authority took shape in 1996, when

Congress enacted legislation to enhance DVAs sharing authority under 38 U.S.C.

8151-8153 by eliminating prior formulations that limited that authority to specialty

medical services and to agreements between DVA and specified medical providers.

Section 8151, entitled Statement of congressional purpose, provides:

It is the purpose of this subchapter to strengthen the medical

programs at Department facilities and improve the quality of

health care provided veterans under this title by authorizing

the Secretary to enter into agreements with health-care

providers in order to share health-care resources with, and

receive health-care resources from, such providers while

ensuring no diminution of services to veterans.

38 U.S.C. 8151 (emphasis added).

Section 8152 defines the terms used in 38 U.S.C. 8151-8153 and provides,

in relevant part: The term health-care resource includes hospital care and medical

services (as those terms are defined in section 1701 of this title), services undersections 1782 and 1783 of this title, any other health-care service, and any health-care

support or administrative resource. 38 U.S.C. 8152.1 Thus, by statute, Congress

has specifically defined health-care resources, consistent with its plain meaning and

common usage, to include such things as hospital care and medical services for

veterans and their families.

1 38 U.S.C. 1701(5) defines hospital care as including such services as medicalservices rendered in the course of the hospitalization of any veteran, and mentalhealth services . . . and training for the members of the immediate family of a veteranto assist with the veterans rehabilitation. 38 U.S.C. 1701(6) defines medicalservices as including surgical, dental, optometric, podiatric, preventative health, andother such services. 38 U.S.C. 1782 provides for counseling, training, and mentalhealth services for immediate family members and caregivers of veterans, and 38U.S.C. 1783 provides for bereavement counseling.

Case 2:11-cv-04846-SJO-MRW Document 124 Filed 05/10/13 Page 10 of 29 Page ID#:3801


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Section 8153, entitled Sharing of health-care resources, provides, in relevant

part:

To secure health-care resources which otherwise might not be

feasibly available, or to effectively utilize certain other health-

care resources, the Secretary may, when the Secretary

determines it to be in the best interest of the prevailing

standards of the Department medical care program, make

arrangements, by contract or other form of agreement 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.

38 U.S.C. 8153(a)(1).

2. Enhanced Use Lease AuthorityAt the time DVA entered into the challenged leases, it was authorized to lease

DVA land through an EUL if the Secretary determined that (1) at least part of the

property under the lease will be to provide appropriate space for an activity

contributing to the mission of DVA; (2) the lease will not be inconsistent with andwill not adversely affect the mission of DVA; and (3) the lease will enhance the use

of the property . . . . Veterans Millennium Health Care and Benefits Act, Pub. L.

No. 106-117, Title II, 208(a), (b), 113 Stat. 1567 (1999) (former 38 U.S.C.

8162(a)(2)(A)(i)-(iii), repealed 2012). Alternatively, DVA could enter into an EUL

if applying the consideration under such a lease to the provision of medical care and

services would result in a demonstrable improvement of services to eligible veterans

in the geographic service-delivery area within which the property is located. Id.

(former 38 U.S.C. 8162(a)(2)(B), repealed 2012). In either case, [f]unds received

by the Department under an enhanced-use lease had to be deposited in the

Department of Veterans Affairs Medical Care Collections Fund. 38 U.S.C.

8165(a)(1). The EUL provisions, which do not limit uses under an agreement to



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health-care resources, protect veterans interests by imposing substantial procedural

requirements, including notice-and-comment requirements, which are not required

under the health-care resource sharing authority. Compare 38 U.S.C. 8163 with id.

8151-53.

These provisions remained largely unchanged until well into the pendency of

this litigation, when Congress enacted the Honoring Americas Veterans and Caring

for Camp LeJeune Families Act of 2012 (Pub. L. No. 112-154, 126 Stat. 1165

(2012)), substantially modifying the EUL authority. Although the notice-and-

comment and other procedural requirements in 38 U.S.C. 8163 remain unchanged,

section 211(b) amended 38 U.S.C. 8162(a)(2) to provide that EULs are now

authorized only for the provision of supportive housing. Thus, EULs are now

authorized only for the purpose of providing supportive housing to homeless

veterans, but they remain subject to the notice-and-comment and robust reporting and

oversight requirements that have always applied to EULs.

3. Restrictions on Disposition of the WLA CampusCongress has repeatedly recognized that the WLA Campus is a unique property

within the collection of properties managed by DVA. It was donated to thegovernment for the express purpose of benefiting veterans, and, when Congress

enacted the EUL authority in 1991, it expressly prohibited the use of EULs on a

portion of the WLA Campus. See Veterans Benefits Programs Improvement Act of

1991, Pub. L. No. 102-86, 401(a), 105 Stat. 417 (1991). In 2008, Congress

amended 8162 to prohibit DVA from entering into EULs on any portion of the

WLA Campus. See Consolidated Appropriations Act, 2008, Pub L. No. 110-161,

224(c), 121 Stat. 2272 (2007).

B. The Administrative RecordThe administrative record (AR or the Record) produced by Defendants is

said to contain all of the material considered, directly or indirectly, in deciding to

enter into the agreements that are the subject of Plaintiffs APA claim. April 10,



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2013 Declaration of Ralph Tillman 3 (Dkt. No. 115-1).2 A review of the Record

reveals that, despite the statutory framework cabining DVAs ability to enter into

agreements encumbering the WLA Campus, DVA has interpreted 8153 to authorize

it to enter into a series of so-called ESAs, through which DVA has diverted a

substantial portion of the WLA Campus to uses that are unrelated to the provision of

health care.

The Record begins with Selected Legal Authorities, including portions of the

health-care resource sharing authority (AR 1-6), one federal regulation, 38 C.F.R.

17.142 (AR 7), two statutes relating to the WLA Campus and its Master Plan (AR 8-

9), and excerpts from the Federal Register relating to the Master Plan (AR 10-14). The

next section, entitled, Agency Guidance, includes various non-binding instructions

developed by DVA concerning exercise of the health-care resource sharing authority

(AR 16-88). This is followed by annual reports to Congress on DVAs use of the

health-care resource sharing authority (AR 89-140), one memorandum relating to

compensated work therapy (AR 141-146), one legal memorandum relating to

Statutory Land Restrictions on the WLA Campus (AR 147-150), excerpts from the

Master Plan (AR 151-89), and documents related to specific ESAs that encumber theWLA Campus (AR 190-1700). The Record includes documents indicating the

following ESAs or related arrangements:

2 Defendants filed the initial version of the Record, numbered 1-1046, on October 22,2012. (Dkt. No. 96.) Defendants then voluntarily supplemented the Record on

November 20, 2012 (one day before the filing of Plaintiffs Motion to Supplement theRecord [Dkt. No.100]) with a collection of documents numbered 116.001-116.139,413.001-413.073, 790.001-128, and 1010.001-1010.175. (Dkt. No. 98.) In responseto this Courts order requiring further supplementation of the Record (Dkt. No. 108),on February 19, 2013 Defendants added documents numbered 878, 881.1-881.5,894.1-894.61, 1010, 1041.1, 1046-1700. (Dkt. No. 112.) Finally, Defendantsvoluntarily supplemented the Record again on April 10, 2013 with documentsnumbered 246.1-246.28. (Dkt. No. 115.) Hereinafter all cites to the administrativerecord will begin with AR and be followed by the page numbers applied by theDefendants.



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ESA Name AR Description

Brentwood School 191-290 ESA with private school so the school could buildand operate athletic facilities on the WLA Campusfor use by the school

Rancho Santa Ana

Botanical Garden

291-331 ESA with non-profit to manage garden located on

the WLA Campus and the Compensated WorkTherapy program associated with the garden

Sodexho MarriotLaundry Services

332-381 ESA with corporation to operate the laundry facilityon the WLA Campus to serve hotels and other

businesses in the surrounding area

UC Regents 382-446 ESA with university so the university could buildand operate a baseball stadium on the WLA Campusfor use by its intercollegiate baseball team

Salvation ArmyBuilding 212

447-521 ESA with non-profit to operate transitional andemergency housing programs in a building on theWLA Campus

Salvation ArmyBuilding 207

522-611 ESA with non-profit to operate transitional andemergency housing programs in a building on theWLA Campus

Twentieth CenturyFox Television

612-667 ESA with corporation to use building on the WLACampus to store film and other equipment

US Vets Initiative 668-823 ESA with non-profit to manage golf course locatedon the WLA Campus and the Compensated WorkTherapy program associated with the golf course

Veterans Park

Conservancy

824-876 ESA with non-profit to create a park on the WLA

Campus used for private events and other purposesWestside BreakersSoccer Club

877-917 ESA with private club to utilize athletic facilitiesand parking on the WLA Campus for soccer

practice and games

Westside Services 918-1055 ESA with corporation to manage and operateparking lots on the WLA Campus

TMC LLC 1056-1084 ESA with corporation to operate a farmers marketon the WLA Campus

RichmarkEntertainment

1085-1316 ESA with corporation to manage and operatetheaters on the WLA Campus for theatrical andmusical productions open to the public and for

private events

Filming

Agreements

1317-1699 Eleven (11) ESAs with production companies tofilm movies, television shows, and advertisementson the WLA Campus

Barrington Park 1689-1700 Agreement with the City of Los Angeles to operate,rent-free, a city park and parking on the WLACampus



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The agreements listed above, excepting the agreements with the Salvation Army, US

Vets Initiative, and Rancho Santa Ana Botanical Garden,3 are the challenged leases.

The challenged leases encumber and impair veterans access to and use of 90.39 of the

388-acres WLA Campus, nearly a quarter of the campus.

C. Plaintiffs APA ClaimPlaintiffs move for summary judgment in their favor on the ground that the

challenged leases violate the Administrative Procedure Act (APA) and are

therefore void, because they constitute final agency action in excess of DVAs

authority or otherwise contrary to law. 5 U.S.C. 706(2)(A) & (C). The Record

reveals that DVA relied on its health-care sharing authority under 38 U.S.C. 8151-

53 to justify the challenged leases. This sharing authority allows DVA to encumber

the WLA Campus, but only via agreements that are for . . . the mutual use, or

exchange of use, ofhealth-care resources. Id. at 8153 (emphasis added). The

challenged leases have nothing to do with health-care resources, so Plaintiffs now ask

the Court to void the challenged leases and enjoin future misuse of DVAs authority

to share health-care resources.4

III. LEGAL STANDARDThe APA, 5 U.S.C. 701-708, governs judicial review of agency action. See

Wilderness Socy v. U.S. Fish & Wildlife Serv., 353 F.3d 1051, 1059 (9th Cir. 2003)

(en banc), amended on rehg en banc on other grounds, 360 F.3d 1374 (9th Cir.

2004). Under the APA, courts may set aside agency action if the agency decision is

arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with

law, 5 U.S.C. 706(2)(A), or in excess of statutory jurisdiction, authority, or

3 Plaintiffs counsel advised counsel for Defendants that Plaintiffs were not challeng-ing these agreements during the meet-and-confer process under Local Rule 7-3.4 As the Court has also previously held, Plaintiffs have standing to bring this claim

because Plaintiffs have suffered injury, see March 16 Order at 12, and the Court canredress the injury by declaring the challenged leases unlawful, seeid. at 14. Thefactual allegations on which the Courts holding rests have been establish bydeclarations in the record. Dkt. Nos. 64-66.



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limitations, or short of statutory right, id. 706(2)(C). Plaintiffs APA claim turns

on whether DVA was authorized to enter into the challenged leases under 38 U.S.C.

8151-53, and the claim is therefore governed by Chevron U.S.A. Inc. v. Natural

Resources Defense Council, 467 U.S. 837, 104 S. Ct. 2778, 81 L. Ed. 2d 694 (1984).

In Chevron, the Supreme Court set forth a two-step test for judicial review of

administrative-agency interpretations of federal law. Under the first step: If 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.

Wilderness Socy, 353 F.3d at 1059 (quoting Chevron, 467 U.S. at 842-43).

Congressional intent may be determined by traditional tools of statutory

construction, and if a court using these tools ascertains that Congress had a clear

intent on the question at issue, that intent must be given effect as law. Id. (quoting

Chevron, 467 U.S. at 843 n.9).

If a court concludes that the statute is silent or ambiguous with respect to the

issue at hand, it proceeds to the second step underChevron, which involves

analyzing the agencys interpretation of the statute. Id. [W]hen it appears that

Congress delegated authority to the agency generally to make rules carrying the forceof law, andthat the agency interpretation claiming deference was promulgated in the

exercise of that authority, id. (quoting United States v. Mead Corp., 533 U.S. 218,

226-27, 121 S. Ct. 2164, 150 L. Ed. 2d 292 (2001)) (emphasis in original), the court

must defer to the agency so long as the agencys answer is based on a permissible

construction of the statute, id. (quoting Chevron, 467 U.S. at 843). For

administrative decisions that do not meet these standards, the agencys interpretation

is entitled not to deference, but to a lesser respect based on the persuasiveness of

the agency decision. Id. at 1067 (quotingMead, 533 U.S. at 228).

IV. ARGUMENTThe central issue in this case is whether the challenged leases fall within

DVAs power to shar[e] health-care resources. They do not. DVAs decisions to



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enter into the challenged leases exceeded its statutory authority and were therefore

unlawful. DVA may enter into sharing agreements under 38 U.S.C. 8151-53 only

ifthey relate to the provision of health-care services to veterans, and the challenged

leases have nothing to do with providing health care to veterans. See March 16 Order

at 11 (finding that the land use statutes make it clear that Congresss intention was to

ensure that property leased to third parties is primarily used to benefit veterans).

Because Congresss intent that ESAs must involve the sharing of health-care

resources is clear from the statutory text, that is the end of the matter, Wilderness

Socy, 353 F.3d at 1059 (quoting Chevron, 467 U.S. at 842), and DVAs decisions to

enter into the challenged leases, which have nothing to do with health-care resources,

should be set aside. See 5 U.S.C. 706(2)(A)&(C).

Even assuming, for the sake of argument, that the health-care resource sharing

statute is ambiguous, DVAs decisions are not entitled to any deference because they

were not made in the exercise of delegated authority to make rules carrying the force

of law, and the Record contains no supportother than bald assertions with no

supporting legal analysisfor DVAs position that 38 U.S.C. 8153 authorizes it to

enter into any agreement with any entity for any purpose. Accordingly, the Courtshould resolve the ambiguity through normal means of statutory construction, and the

only reasonable reading of the statute is that the agreements must relate to provision

of health care.

A. The Challenged Leases Are Void Because They ExceedUnambiguous Limits on DVAs Power To Share Health-CareResources

The scope of DVAs power to share health-care resources is unambiguous.

Simply put, DVA may arrange for DVA and a third party to mutually use or exchange

the use of resources related to the provision of health care. DVA may not enter into

traditional commercial leases, which dispose of land otherwise dedicated for the direct

benefit of veterans in exchange for rent. Thus, the challenged leases plainly exceed the

scope of DVAs authority and must be voided.



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1. Congress Has Unambiguously Defined the Phrase Health-Care Resource

Congress granted DVA authority to share health-care resources but went to

great pains to set an outer boundary to that authority, providing clear and unambiguous

instructions as to what types of resources DVA may share. Specifically, Congress mad

clear that, although DVA has considerable discretion to decide whether and when to

share health-care resources, that discretion extends only to agreements that are relate

to provision of health care. The plain text and statutory structure convey that Congress

did not intend to give DVA blanket discretion to enter into any lease with any entity for

any purpose, including commercial enterprises wholly unrelated to the provision of

health care, so long as the lease generated revenue for DVA. See Wilson v. C.I.R., 705

F.3d 980, 987-88 (9th Cir. 2013) (The first step in statutory construction is examining

the language of the specific provision at issue, as well as the structure of the statute as a

whole, including its object and policy. (internal quotation marks omitted)).

Congress explicitly stated that it authorized DVA to enter into health-care

resource sharing agreements to strengthen the medical programs at Department

facilities and improve the quality of health care provided veterans through agreementwith health-care providers in order to share health-care resources with, and receive

health-care resources from, such providers while ensuring no diminution of services to

veteran. 38 U.S.C. 8151 (emphasis added).

Congress then proceeded to define the health-care resources that DVA is

authorized to share, leaving no doubt that the kind of resource that can be shared is, as

plain usage (and common sense) would suggest, a resource related to the provision of

health care: The term health-care resource includes hospital care and medical

services (as those terms are defined in section 1701 of this title), services under section

1782 and 1783 of this title, any other health-care service, and any health-care support o

administrative resource. 38 U.S.C. 8152(1). Hospital care and medical care are

thus, examples of resources that constitute a health-care resource, and they are



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defined consistent with their plain meaning. Hospital care includes prototypical

aspects of health care like medical services rendered in the course of the

hospitalization and mental health services, 38 U.S.C. 1701(5), as does medical

services, which includes medical examination, treatment, and rehabilitative services,

38 U.S.C. 1701(6). The other cross-references in the definition are to provisions that

address family mental health counseling and training, 38 U.S.C. 1782, and

bereavement counseling, 38 U.S.C. 1783, both of which are related to care and

treatment of veterans. Both support and administrative resources can be health-

care resources only if they are health-care support or administrative resources and

thus relate to hospital care or medical services, e.g., a health-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

For resources to be health-care resources, they must be of the same kind as

hospital care, medical care, health-care service, and related health-care support

and administrative resources. See United States v. Lacy, 119 F.3d 742, 748 (9th

Cir.1997) (holding that, under the canon of statutory construction ejusdem generis, a

general term following more specific terms means that the things embraced in thegeneral term are of the same kind as those denoted by the specific terms). All of the

terms included in the definition thus relate exclusively to physical and mental health-

care or rehabilitation services for veterans and their relatives.

Congress then authorized the Secretary to make arrangements . . . for the mutua

use, or exchange of use, ofhealth-care resources between Department health-care

facilities and any health-care provider, or other entity or individual. 38 U.S.C.

8153(a). Congress thus limited DVAs authority under 8153(a) to agreements

involving health-care resources, as defined in 8152(1).5

The plain language,

5 Section 8153(a)(3) sets forth special procedures for acquir[ing] certain health-careresources, including a commercial service, the use of medical equipment or space, orresearch, 38 U.S.C. 8153(a)(3)(A), and authorizes the Secretary to establish special

procedures that are subject to public comment when DVA intends to procure thehealth-care resources from certain entities, 38 U.S.C. 8153(a)(3)(B)(ii). Although

(Footnote Contd on Following Page)



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structure, and articulated purpose of the health-care resource sharing statute thus make

clear that Congress intended that such agreements would involve only resources that ar

directly related to providing health care and treatment to veterans and did not intend to

authorize DVA to encumber DVA resources by entering into purely commercial land

deals that have nothing at all to do with the provision of such care to veterans.

2. Reading 8153 to Authorize the Challenged Leases Would BeInconsistent with the Broader Statutory Structure RegulatingUse of DVA Property

A contrary reading of 8153 would also be inconsistent with the overall statutor

framework that Congress has created for DVAs management of DVA land generally

and the WLA Campus specifically. Congress included a provision in the EUL statute

that explicitly authorized commercial land deals that do not directly relate to providing

health care if DVA determines that the revenue generated will support DVAs broader

mission of providing care to veterans. See Veterans Millennium Health Care and

Benefits Act, Pub. L. No. 106-117, Title II, 208(a), (b), 113 Stat. 1567 (1999) (forme

38 U.S.C. 8162(a)(2)(B)) (authorizing EUL if applying the consideration under such

a lease to the provision of medical care and services would result in a demonstrable

improvement of services to eligible veterans in the geographic service-delivery area).Reading 8153 to authorize DVA to enter into the challenged leases would require an

assumption that Congress intended to create two distinct processes through which the

agency can accomplish exactly the same endentering into a purely commercial land

deal that provides no direct health-care benefit to veterans but raises revenue for the

agencybut included explicit authorization, and imposed specific procedural and

substantive conditions, with respect to only one of the two.

(Footnote Contd From Previous Page)

this provision does not apply here because none of the challenged leases involve theacquisition of health-care resources, the references to commercial service, medicalequipment and space, and research in subsection (a)(3)(A) establish that they mayqualify as a health-care support or administrative resource, 38 U.S.C. 8152(1). Aswith other such support or administrative resources, however, they satisfy thedefinition of health-care resources only if they are health-care support oradministrative resources, i.e., related to the provision of health care.



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Moreover, if 38 U.S.C. 8153 is read to authorize DVA to enter into whatever

land deals it desires simply because the revenue supports DVAs operations, the EUL

statute would be superfluous: There is no reason why DVA would ever choose to use

the EUL authority, with its notice-and-comment requirement, strict limitations on how

revenue generated by a lease can be used, and specific and onerous standards for

approving an agreement, if it could circumvent all of those requirements simply by

entering into the same agreement, calling it a health-care resource sharing agreement,

and citing 8153. The EUL statute demonstrates that Congress knew how to

specifically authorize DVA to enter into commercial leases for revenue-generating

purposes and that it did so in a manner that is inconsistent with reading its separate

authorization of health-care resource sharing agreements to cover such purely

commercial leases. See, e.g., United States v. Wahid, 614 F.3d 1009, 1014 (9th Cir.

2010) ([W]e abide by the principle that where Congress includes particular language i

one section of a statute but omits it in another section of the same Act, it is generally

presumed that Congress acts intentionally and purposely in the disparate inclusion or

exclusion. (internal quotation marks omitted)).

In fact, the comprehensive statutory scheme that Congress enacted regulatingDVAs ability to lease its property to third parties would be completely undermined if

8153 were read as a blanket delegation of authority to lease its property however it

sees fit. Part VI of Title 38 is entitled Acquisition and Disposition of Property, and

every other provision in Part VI related to disposition of property would be

meaningless if 8153 were read to authorize DVA to enter into the challenged leases.

Reading 8153 to authorize the challenged leases would subvert that clear

congressional intent and must therefore be rejected.

3. Legislative History Confirms that the Challenged Leases AreContrary to Congresss Intent

Although resort to legislative history is unnecessary because the plain language

and structure of the statute unambiguously establish Congresss intent, the legislative



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history of both 38 U.S.C. 8151-53 and 8161-69 confirm that Congress did not

intend to authorize DVA to enter into purely commercial land deals through 8153.

See Wilson, 705 F.3d at 988 (holding that courts may look to legislative history to

confirm congressional intent).

In 2007, Congress stripped DVA of any power to enter into EULs covering the

WLA Campus. See Pub. L. No. 110-161, 224(a). Prior to that, the EUL power

explicitly authorized DVA to lease certain portions of the WLA Campus for uses

unrelated to providing health-care to veterans in exchange for rent and use the rents to

fund its activities. If 8153 authorized DVA to enter into exactly the same sort of

agreements, as health-care resource sharing agreements, then stripping DVA of its

power to enter into EULs on the WLA Campus would have been a meaningless act.

SeeBoise Cascade Corp. v. U.S. E.P.A., 942 F.2d 1427, 1432 (9th Cir. 1991) (Under

accepted canons of statutory interpretation, we must interpret statutes as a whole, givin

effect to each word and making every effort not to interpret a provision in a manner tha

renders other provisions of the same statute inconsistent, meaningless or superfluous.)

Moreover, just last year, Congress overhauled the EUL authority, removing the

only explicit authorization in Title 38 for DVA to enter into purely commercial leases tgenerate general revenue for DVA (former 8162(a)(2)(B)) and replacing it with a

requirement that EULs may be used only for the purpose of providing supportive

housing for homeless veterans. Pub. L. No. 112-154, 211(b). Again, this demonstrate

that Congress knew both how to authorize DVA to lease underutilized property for

purposes unrelated to veteran health-care to generate additional operating revenue and

how to repeal that authority. This underscores even further that reading 8153 to

authorize any and all leases of DVA property would undermine clear congressional

intent, as revealed through the structure and history of the relevant statutory scheme.

Likewise, the legislative history of the 1996 amendments to 8151-53

confirms that Congress intended that any agreements made under 8153 must relate

directly to health care for veterans. Prior to the 1996 amendment, Congress had



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authorized DVA to share specialized medical resources only with other health-

care facilities, . . . research centers, or medical schools and health-care resources

only with state home facilities. Priority VA Health Care For Persian Gulf

Veterans, Pub. L. No. 103-210, 3(a), 107 Stat. 2497 (1993). Eventually, Congress

recognized that those limits on the sharing authority unwisely prohibited DVA from

benefiting from sharing resources that support its provision of health care, such as

various risk assessment, accounting, or other nonmedical services, or joint efforts

with other health-care providers, such as health maintenance organizations,

insurance carriers, individual physicians, or other individual care providers. S. Rep.

104-372 at 21 (1996).

The 1996 amendments were intended to ease these various restrictions by

authorizing VA to enter into agreements with any non-VA health care providerfor

the mutual use or exchange of use of any health care resources. Id. (emphasis

added). The 1996 amendments authorized DVA to share all health-care resources

(and, as noted above, Congress included a comprehensive definition of that term in

the statute) and to do so without limiting who may share in those resources, and they

made no mention of purely commercial leases wholly unrelated to the provision ofhealth care. Thus, the legislative history supports the conclusion that the 1996

amendments were intended, as the plain language of the statute makes clear, to

greatly expand DVAs authority to enter into agreements related to the provision of

health care, but not to otherwise expand DVAs authority to enter into commercial

leases wholly unrelated to the provision of health care to veterans.

4. The Challenged Leases Exceed DVAs Authority to ShareHealth-Care Resources

The challenged leases have nothing to do with the sharing of health-care

resources. Rather, they are purely commercial leases involving land or buildings that

happen to be owned by DVA. Accordingly, DVAs decisions to enter into the

challenged leases are outside DVAs statutory authority and must be set aside.



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Brentwood School. DVA entered an agreement with the Brentwood School

under which the school has the right to develop and use a 20-acre parcel of the WLA

Campus as an athletic complex for the school. AR 248-79. The agreement expressly

provides that the area shall be fenced at the perimeter to prevent unauthorized use.

AR 255. The Brentwood School is entitled to use the facility for any school-related

or school-sponsored purpose or function. Id. DVA has no absolute right to enter or

use the area except for the purpose of inspection or protection of the interests of the

DVA, and DVA can request permission to use the facility only at mutually

convenient times to be agreed upon in advance. AR 256. The agreement, thus,

generally excludes veterans from 20-acres of land on the WLA Campus for the benefit

of the Brentwood School, its students, and their families. Neither the agreement nor th

supporting documents articulate any health-care resource on the property, let alone any

benefit to veterans, who, in the absence of the ESA, would have had unfettered access

to the land.

Sodexho Marriot Laundry Services. DVA entered an agreement for use of

Building 224 for processing hospitality linen. AR 341-66. After the original term of

the agreement expired, Sodexho continued its use of the buildings under a series ofextensions, for which the record does not reflect a termination date. AR 374-78.

Sodexho may operate the facility 24 hours a day, 7 days a week and shall lock the

building and provide a master to DVA security. AR 346. The agreement does not

provide for the mutual use or exchange of use of the laundry facilities between Sodexh

and DVA, i.e., there is no requirement that DVA laundry be processed, and neither the

agreement nor the supporting documents articulate how the agreement involves a

health-care resource that would provide any direct benefit to veterans. Indeed, DVAs

only explanation of how the agreement would enhance services to veterans was that

[i]ncome generated . . . will be used to support WLAVAMC medical care for

veterans. AR 334. This agreement is purely a commercial lease with a private

corporation that falls outside DVAs power to share health-care resources.



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UC Regents (Baseball Stadium). DVA entered into an agreement with the UC

Regents pursuant to 38 U.S.C. 8151-53 for the use of Jackie Robinson Stadium by

the UCLA baseball team, which occupies approximately 7.35 acres of the WLA

Campus. The May 2001 agreement was for a ten-year term. AR 415-429. The

agreement provides that the Regents will have priority use of the stadium for their

baseball team, AR 418, and that DVA has the right to use the stadium in the event

that the Stadium is not booked, provided it seeks advance notice of its desire to use the

stadium, AR 419, although DVA must reimburse the Regents for costs of DVA events

at the stadium, AR 419, 425. The agreement, thus, generally excludes veterans from 7.

acres of land on the WLA Campus for the benefit of the UCLA baseball team and does

not relate in any way to the provision of health-care resources to veterans. In a 2008

Memorandum to the Secretary, Under Secretary for Health Michael J. Kussman

recommended against approving the renewal of the Jackie Robinson ESA, repeatedly

stressing that the agreement has no impact or direct benefit to veteran care. AR

409-411. Although Former Secretary James Peake agreed with this assessment,AR

411, DVA continued to renew the ESA on an ongoing basis following the termination

of its initial term in May 2011, AR 430-444.Twentieth Century Fox Television. DVA entered an agreement with Twentieth

Century Fox Television for the use and development of a 73,160 square foot parcel of

land on the WLA Campus for parking, storage and maintenance of production sets.

AR 648-65. The agreement runs through August 2016 and provides for a 10-year

renewal option. AR 648, 650. The agreement permits Fox to construct a 40,000 square

foot building to house production sets and equipment. AR 614, 649, 660-61. This

purely commercial lease does not involve the sharing of health-care resources. Thus,

the only benefit that DVA identified before entering the agreement was revenue and

thepotential for employment opportunities because Fox was interested in employin

several veterans as guards for the site, AR 614. However, there is no corresponding



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provision contemplating employment for veterans in the actual, executed ESA, AR 648

665. This ESA does not relate to the provision of health care resources for veterans.

Veteran Park Conservancy. In 2006, DVA entered into discussions to

convert a pre-existing MOU with the non-profit Veterans Park to an agreement

under the health-care resource sharing authority. AR 826. In the executed agreement,

DVA provides a new entity known as the Veterans Park Conservancy with use of

approximately sixteen (16) acres of land . . . on a year round basis for a period of up to

30 years. AR 861-76, 868. In lieu of consideration, DVA apparently expects a gift o

capital improvements to exceed $5 million, AR 827, but the Record contains no

evidence that such a gift was ever actually made. The agreement itself contains no

provisions tying it to the provision of medical or health care resources. AR861-76. Th

now-encumbered space would otherwise have been available to veterans for the same

purposes without the ESA. Indeed, the ESA serves only to deprive veterans of access t

the space throughout the year by providing the resource to a private party.

Westside Breakers Soccer Club. DVA entered into an agreement with the

Westside Breakers Soccer Club for the use of MacArthur Field and lot #38 on the WLA

Campus as a location for soccer practices and matches. AR 895-915. The version ofthe agreement in the Record reflects a term covering 2010-11, and the Record does not

reflect the extent to which an arrangement with the club continues. The agreement

identifies significant portions of each day during which the club is entitled to use the

field. AR 903. The ESA contains no provisions that benefit veterans, much less

involving the provision of health care to veterans.

Westside Services. DVA entered into an agreement with Westside Services,

LLC for the control and operation of all vehicular parking areas on the WLA

Campus. AR 1047-53. The agreement runs for another nine years. AR 1055. The

ESAs only apparent purpose is revenue generation from the operation of parking

facilities for surrounding businesses, AR 1047, and as-needed parking management for

events unrelated to health-care, AR 1059.



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TMC LLC (Farmers Market). The Record indicates that the ESA with TCM,

LLC is merely a commercial lease of DVAs land so that TCM could hold a farmers

market. AR 1056-84. Indeed, DVAs Memorandum Review document, which formed

the basis for the TCM ESA, does not mention the word health care. AR 1064-65.

Richmark Entertainment. The resource to be shared under DVAs

agreement with Richmark Entertainment is booking services and theatre management

services, AR 1145, 1214, for theatrical productions in theatres on the WLA Campus.

The agreement is purely commercial in nature and provides no health-care benefit to

veterans. In January of 1999, Richmark submitted a proposal to DVA to establish the

Wadsworth [theatre on the WLA Campus] as a theatre to house the road companies o

many Broadway and Off Broadway shows. AR 1087-1090. DVA ultimately formed

an agreement with Richmark to manage the theatre which contained no mention of

veterans or health care, describing the agreement as a sound business decision. AR

1091. DVA renewed its contract with Richmark on January 1, 2006, in a sharing

agreement that again failed to mention veterans or health care. AR 1208-48.

Filming Agreements. The Record contains documents related to eleven separat

Filming Agreements on the WLA Campus pursuant to the health-care resourcesharing authority. AR 1339-70 (7 Pounds Production), 1385-94 (Warner Bros.), 1404-

31 (NBC Universal), 1452-71 (20th Century Fox Television), 1483-1514 (TNT-

Leverage), 1523-50 (Amy Weiss), 1564-94 (NBC Universal), 1608-19 (Balance

Production), 1630-40 (United Feature Film), 1652-62 (Psychic Bunny) & 1674-84

(Hemisphere Entertainment). None of these agreements have any relationship to

provision of health-care for veterans. In fact, among the most popular locations for

filming on the WLA Campus are Buildings 205, 208 and 209, see, e.g., AR 1320, 1447

1531, 1647, which were purportedly set aside by DVA for housing for homeless

veterans, AR 11. The Record indicates that no proposed Filming Agreement was ever

rejected by DVA.



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Barrington Park. In 1983, the VA entered into a rent-free agreement with the

City of Los Angeles under 38 U.S.C. 5022 (now 38 U.S.C. 8122) for 12 acres to be

used for public recreational use. AR 1690, 1697. This land ultimately became known

as Barrington Park. AR 1699. By an undated letter, DVA noted that the agreement had

lapsed in 1994 and proposed that the agreement be renewed as an enhanced sharing

agreement, with two possible approaches: (1) the City of Los Angeles paying

$300,000.00 per year; or (2) the City of Los Angeles presumably would continue

operating the park free of rent, but would have to share revenue generated by the

parking lots or operations of the park, or both. AR 1699-1700. The Record contains no

evidence that the City responded to the letter or that the ESA was formally executed,

although the VA GLA Master Plan indicated that negotiations were suspended. AR

186. Neither the original agreement, nor the undated letter proposing the ESA make

any reference to the development or sharing of health-care resources on the property

now used as Barrington Park or of any benefits to veterans.

B. Even Assuming the ESA Statute is Ambiguous, DVAs Decisions AreNot Due Any Deference

Congresss intent in 8153 is clear, so the agencys interpretation of the statute iirrelevant. SeeWilderness Socy, 353 F.3d at 1060. Nonetheless, even assuming for th

sake of argument that the health-care resource statute is ambiguous, this Court should

not give any weight to DVAs interpretation. As explained in detail in Plaintiffs

Opposition to the Governments Motion for Summary Judgment, the decisions to enter

into the challenged leases were not made pursuant to a delegation of authority carrying

the force of law, so DVAs decisions are not entitled to deference underChevron. See

Pls. Oppn to Defs. Mot. for Summ. J. at 14-15. The informal interpretations

contained in the ESAs themselves and the internal DVA policy bulletins in the Record

are not due any weight underMeadandSkidmore because they contain no reasoned

analysis and are nothing more than conclusory assertions. Seeid. at 15-17. DVAs

interpretation therefore does not warrant any deference, and the only sensible reading o



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the statutethat it authorizes only sharing agreements that are directly related to the

provision of health carecontrols. SeeWilderness Socy, 353 F.3d at 1069

(discounting agency interpretation underSkidmore because it goes beyond the limits

of what is ambiguous and contradicts what in our view is quite clear (quoting

Whitman v. Am. Trucking Assn, 531 U.S. 457, 481, 121 S. Ct. 903, 149 L. Ed. 2d 1

(2001))).

V. CONCLUSIONFor the foregoing reasons, Plaintiffs respectfully submit that the Court should

grant their motion for summary judgment.

Dated: May 10, 2013. ARNOLD & PORTER LLP

By: /s/ John C. UlinJohn C. UlinAttorneys for Plaintiffs


valentini v shinseki: pls msj

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