Happy Holidays!  I am excited to announce that my colleague Mikaela (Schulz) Milligan are joining forces with Shane Pennington to bring you a (somewhat) regular column about admin and regulatory cases in the Fifth Circuit.  While I have written for Notice and Comment as a Guest Columnist a few times, this post is my first as a regular contributor.  And I am pleased that I get to do so for my home Circuit!

It will not be lost on regular readers of this column that most of the Fifth Circuit’s admin law cases begin with “Texas v. [insert federal agency].”  The case I highlight today is no different.  On the eve of Thanksgiving, the Fifth Circuit issued its decision in Texas v. DHS, No. 23-50869 (5th Cir. Nov. 27, 2024).  There, the court held that Texas was entitled to a preliminary injunction based on its state law claims of trespass to chattels and conversion, and that the federal defendants’ sovereign immunity was waived by Section 702 of the Administrative Procedure Act (APA).

The case arose from a dispute between Texas and the federal government over whether federal agents could cut or remove concertina wire (“c-wire”) fences that Texas had installed on its own property.  Texas claimed that the fences were intended to deter illegal immigration and drug trafficking, and that the federal defendants—DHS, Customs and Border Protection (CBP), Border Patrol, and their officials—had no authority or justification to damage or destroy them.  Texas sued the federal defendants in federal district court, alleging that their actions violated the APA, federal immigration statutes, and state common law.  Texas sought a preliminary injunction to prevent the federal defendants from interfering with its fences, except for medical emergencies.

The district court denied the preliminary injunction, ruling that the federal defendants had sovereign immunity against Texas’s state law claims, and that Texas had not shown a likelihood of success on its federal claims.  See State of Texas v. U.S. Dep’t of Homeland Sec., No. DR-23-CV-00055-AM, 2023 WL 8285223, at *7 (W.D. Tex. Nov. 29, 2023).  The district court found that Section 702 of the APA, which waives sovereign immunity for nonmonetary claims against federal agencies or officers, did not apply to Texas’s state law claims, because they did not arise under federal law or under Section 1331 of the federal question jurisdiction statute.  The district court also found that Texas had not established that the federal defendants had a policy, practice, or pattern of cutting the fences, or that their actions constituted final agency action subject to judicial review under the APA.  Id. at 15-16.  Moreover, the district court found that Texas’s ultra vires claim, which challenged the federal defendants’ actions as exceeding their statutory authority, was not viable because the federal defendants had some discretion to enter private lands within 25 miles of the border to prevent illegal entries under 8 U.S.C. § 1357(a)(3).  Id. at *17.

Texas appealed the district court’s denial of the preliminary injunction to the Fifth Circuit, which reversed and granted the injunction.  The Fifth Circuit disagreed with the district court on several grounds, but the most notable aspect of its ruling was its interpretation of Section 702 and its application to Texas’s state law claims.  Specifically, the Fifth Circuit held that Section 702 clearly and unequivocally waived the federal defendants’ sovereign immunity for Texas’s state law claims.  Writing for a divided panel, Judge Duncan reasoned that Texas’s lawsuit was “an action in a court of the United States seeking relief other than money damages and stating a claim that an agency or an officer or employee thereof acted or failed to act in an official capacity or under color of legal authority,” as Section 702 provides.  Slip Op. at 16.  The majority rejected the district court’s view that Section 702 required Texas’s state law claims to arise under federal law or under Section 1331, noting that the plain language of the statute did not contain such limitations. 

The plain language interpretation was consistent with decisions from four other circuits that have expressly recognized that Section 702 waives sovereign immunity for state law claims for nonmonetary relief, such as Texas’s trespass claim.  See Slip Op. at 20–21.

Judge Duncan acknowledged that this interpretation of Section 702 was contrary to that expressed in Judge Ramirez’s dissent.  Judge Ramirez believed that Section 702 did not waive sovereign immunity for Texas’s state law claims, because they did not involve final agency action or arise under Section 1331.

The Fifth Circuit’s ruling on Section 702 could have a significant impact on the future litigation between states and federal agencies in the Fifth Circuit and beyond.  States could be more likely to sue federal agencies for injunctive relief based on state or common law claims.  And those suits need not be restricted to cases involving property rights, environmental protection, or other areas traditionally reserved to the state’s; they could also involve, as here, issues of national importance.

Damonta D. Morgan is an associate in the Washington, DC office of Paul, Weiss, Rifkind, Wharton, and Garrison, LLP.