In mid-July, a divided Ninth Circuit panel rendered the Federal Vacancies Reform Act (FVRA) a “near dead letter,” to quote from Judge Morgan Christen’s dissent.

Before we get to the majority’s decision, let’s start with the backstory. The Constitution, of course, requires high-level officers to be appointed by the President with the “advice and consent” of the Senate. The Senate’s involvement “serves both to curb Executive abuses of the appointment power and to promote a judicious choice of [persons] for filling the offices of the union.”       

Notwithstanding its virtues, the constitutional appointments process suffers from a timing problem. For any number of reasons (death, resignation, etc.), officers may depart abruptly. Yet nominating and confirming a successor takes time, during which the position would remain vacant. Lawmakers of the founding era recognized this dilemma, which is why, since 1792, there have been statutory procedures for temporarily filling vacancies without Senate consent. Historically, these statutes regulate who can be a temporary officer and for how long.

Congress established the prevailing approach to temporary leadership in 1998, with passage of the FVRA. Regarding the “who,” the FVRA specifies that the vacant position’s “first assistant” is the default acting official. Regarding the “how long,” the FVRA generally limits acting officials from serving more than 210 days. (There are narrow alternatives to these parameters, but such nuance is immaterial to this post).

Importantly, the “R” in “FVRA” stands for “Reform.” After decades of interbranch conflict over the prior version of the statute, in 1998, legislators “perceived a threat to the Senate’s advice and consent power.” Thus minded, Congress established novel mechanisms to police violations, beyond what prior incarnations of the statute had provided in terms of enforcement. Specifically, the 1998 FVRA voids actions taken by officers operating in violation of the statute’s strictures. The FVRA further provides that voided actions cannot be ratified. This latter restriction is known as the “ratification bar,” and it is the crux of this month’s case. But before we get there, we need to further set the scene.

Management Mess at the DHS

Again, the FVRA’s default pick for any vacant position is the “first assistant.” So, what’s a first assistant? The FVRA doesn’t say.

For department heads, Congress typically identifies a “first assistant” through legislation establishing a succession order. However, for lower officers requiring Senate-confirmed leadership, Congress is often silent on the question, in which case some agencies have specified the “first assistant” through regulation. See, e.g., 28 C.F.R. § 0.137(b) (authorizing the Attorney General to designate first assistants at sub-cabinet offices where the deputy is also vacant).

Congress adopted a hybrid approach to deal with vacancies at the top of the Department of Homeland Security. Under the agency’s enabling act, the Deputy Secretary is the first in line to be “first assistant.” If, however, the Deputy is unavailable, then the statute calls for the Secretary’s authority to temporarily fall to the Undersecretary for Management. See 6 U.S.C. § 113(g)(1). To address a scenario where the Secretary, Deputy Secretary, and Undersecretary are all unavailable, Congress authorized the Secretary to establish a further “order of succession.” See 6 U.S.C. § 113(g)(2).

In April of 2019, DHS Secretary Kirstjen Nielsen prepared to resign. At the time, the Deputy Secretary and Undersecretary positions were unfilled, meaning that Secretary Nielsen possessed statutory authority to establish her preferred “first assistant.” Thus, on her last day, Secretary Nielson issued a new order of succession at the DHS. In real-world terms, this meant that the Commissioner of Customs and Border Protection assumed the role of Acting Secretary, instead of the Administrator of the Federal Emergency Management Service.

But she made a big mistake. In trying to modify the existing order of succession, Secretary Nielson inadvertently included language limiting her directive to times of “disaster or catastrophic event.” This meant that the pre-modified order—the one that Secretary Nielson was trying to change—should have remained in force (because there was no pending “disaster or catastrophic event” to trigger her preferred order of succession).

Despite this error, the DHS relied on Secretary Nielsen’s defective directive in establishing her successors. Over the following 22 months, the agency was managed by two temporary leaders, neither of whom was a duly appointed Acting Secretary.

DHS’s Surety Bonds Rule: Fruit of the Poisonous Tree?

When the DHS initiates deportation proceedings, the agency’s policy is to release aliens from custody during the proceeding—but only if the alien posts an immigration bond. One type of bond, known as a surety bond, is guaranteed by underwriting companies. If an alien fails to appear at their removal proceeding, the DHS can require the surety to pay the bond amount to the government.

In July of 2020, (improperly appointed) Acting Secretary Chad Wolf promulgated a rule to regulate surety bonds. The rule authorized the DHS to reject such bonds from companies with outstanding balances owed to the government or with high breach rates.

In December of 2020, a group of bonds businesses challenged the rule in the United States District Court for the Northern District of California. The parties consented to the jurisdiction of a United States Magistrate Judge pursuant to 28 U.S.C. § 636.

Before the magistrate judge, the plaintiffs argued, inter alia, that the surety bonds rule should be set aside because Chad Wolf was not properly serving as Acting Secretary of DHS when he purported to promulgate the rule.

Ratification: An Antidote?

Of course, the presidency changed hands in January of 2021, shortly after the start of the suit against the immigration bonds rule. About a month later, the Senate confirmed Alejandro Mayorkas to lead the DHS, making him the first properly appointed agency head in almost two years.

That April, Secretary Mayorkas ratified the surety bond rule. In so doing, he said he had “full knowledge” of the rule and believed ratification was “consistent with the Department’s authorities.”

However, the FVRA prohibits the ratification of voided actions, as mentioned above (and discussed further below). In August of 2021, the plaintiffs amended their complaint to argue that Secretary Mayorkas did not have the authority to cure the rule’s defects through ratification.

The magistrate judge granted summary judgement to the plaintiffs, finding that the FVRA’s “ratification bar” unambiguously prohibited Secretary’s Mayorkas’s ratification of the surety bond rule.

The government timely appealed.

Divided CA9 Panel Guts the FVRA

In Gonzales & Gonzales Bonds & Ins. Agency, Inc. v. DHS, the Ninth Circuit reversed.

As the controversy centered on the meaning of the FVRA’s “ratification bar,” it’s worthwhile to review the statutory language. Under the FVRA’s enforcement provision, actions by noncompliant officials have “no force or effect” and “may not be ratified.” See 5 U.S.C. § 3348(d). These penalties, however, apply only to “the performance of any function or duty of a vacant office.” In turn, the statute defines a “function or duty” as one “that is required by [statute or regulation] to be performed by the applicable officer (and only that officer).” See § 3348(a)(2). Putting it all together, the FVRA may be enforced only against “functions or duties” assigned to an individual officer “and only that officer.”

The Justice Department advanced a narrow reading of the FVRA’s scope—as it has done since the statute’s enactment in 1998. Under the government’s long-held (and self-serving) interpretation, the parenthetic “and only that officer” limits enforcement of the FVRA solely to “nondelegable” duties. Put differently, the key question is whether the enabling act expressly forbids an officer from delegating the duty to a subordinate. If the officer could delegate the function, then FVRA penalties don’t apply—regardless of whether the officer actually delegated the function.

Naturally, appellees advanced a broader reading. The challengers argued that the phrase “(and only that officer)” excludes regimes in which Congress has directed more than one officer to perform a function or duty. See, e.g., 18 U.S.C. § 2332(d) (directing either the Attorney General or their highest-ranking subordinate to authorize certain prosecutions). Under this approach, subdelegations are beside the point; instead, the only thing that matters is whether the statute assigns authority to a single office. Because the agency’s enabling act assigns regulatory authority over immigration bonds to the DHS Secretary—and no one else—the disputed rule is required to be performed by that officer, “and only that officer.” See 8 U.S.C. § 1103(a)(3).

Ultimately, Judges Carlos Bea and Anthony Johnstone adopted the government’s interpretation.

In a powerful dissent, Judge Morgan Christen cried foul. She accused the majority of leaving the FVRA “all but inoperative.” The problem, as she saw it, was that the majority limited FVRA enforcement to situations that don’t exist. According to the majority, the FVRA applies only where Congress expressly prohibited subdelegation at the agency—yet Congress never does so. As a result, the majority “excludes nearly every statutory function or duty in the United States Code” from FVRA enforcement.

It Could Have Been Worse

Judge Christen might take a dollop of solace from the fact that the majority could have gone even further in gutting the FVRA.

As explained in an insightful Notice & Comment post by Prof. Nina Mendelson, the Federal Circuit also has interpreted the FVRA’s enforcement provision. In Arthrex, Inc. v. Smith & Nephew, Inc., that court reached the same reading as the majority in Gonzales Bonds. See 35 F.4th 1328, 1336–38 (Fed. Cir. 2022). Still, the two courts differed in their respective approaches, and these methodological differences carry important consequences for litigation in this field.

For its part, the Ninth Circuit panel took a sequential approach. First, the court asked if there was a violation; if so, the court next inquired whether the violation is subject to FVRA enforcement.

But there was no such sequencing at the Federal Circuit. Instead, the court collapsed these discrete questions, finding no FVRA violation because the enforcement section didn’t apply.

Prof. Mendelson explains why this difference matters:

The text that defines the key statutory term, “function or duty,” defines it only for purposes of the enforcement section, not the entire statute. See 5 U.S.C. 3348(a) (“In this section . . .”). And there is no reason to think the FVRA impliedly repeals the Administrative Procedure Act’s general review provisions, so they (along with a harmless error rule and the potential for ratification) could continue to cover actions undertaken by illegal “actings” when the FVRA’s specific enforcement provisions do not apply.

In other words, just because an FVRA violation can’t be enforced by the FVRA, doesn’t mean it can’t be enforced by APA 706(2)(A). To be sure, a ratification would cure an APA violation; however, under the Federal Circuit’s ruling, the agency needn’t even bother with a ratification. The Ninth Circuit’s approach thus provides for comparatively greater accountability than the Federal Circuit does.

Notably, the majority in Gonzales Bonds directly acknowledged that its decision did not preclude such APA suits. See slip op. at 25.

The Big Picture

Besides the Ninth and Federal Circuit Courts, the Third Circuit also has held the FVRA enforcement provision to be toothless. See Kajmowicz v. Whitaker, 42 F.4th 138, 148 (3d Cir. 2022). Moreover, this interpretation is consistent with a Second Circuit decision and dicta from the D.C. Circuit. See Stand Up for Cal.! v. U.S. Dep’t of Interior, 994 F.3d 616, 622 (D.C. Cir. 2021); Schaghticoke Tribal Nation v. Kempthorne, 587 F.3d 132, 135 (2d Cir. 2009). For all intents and purposes, FVRA enforcement is a dead letter in the U.S. Circuit Courts. This reality is perhaps piteous from a policy perspective. As Prof. Mendelson, Cato’s Tommy Berry, and others have observed, many agencies honor the FVRA primarily in the breach. FVRA abuse has been particularly acute where the statutorily designated first assistant also is vacant. In this increasingly common scenario, recent administrations have pushed the limits of the FVRA. For now, courts aren’t pushing back.

Update [8/17/24 8:45AM]: A keen FVRA watcher wrote me: “The one thing that confuses me about the case is why the FVRA applies at all given that this is about the DHS’s own vacancies statute, which I had understood to completely supersede the FVRA since it was enacted after the FVRA.”

This is a superb question. The court wasn’t super clear on the interplay of the FVRA and the APA in the amended complaint. As I understand it, it was brought as an APA 706(2)(A) suit. The bonds businesses argued that the invalid appointment of the acting secretary—under the DHS statute—rendered the rule unlawful under APA § 706(2)(A). Secretary Mayorkas’s ratification of the rule would otherwise cure the APA violation, but then the bond businesses amended their complaint to argue that FVRA § 3348 prohibits ratification. In their amended complaint, I assume the bond businesses’ argument went something like this –> If the agency runs afoul of the enabling statute’s succession order, then it is not in compliance with FVRA § 3347(a)(1)(A). And if the agency runs afoul of § 3347, then it falls within the scope of § 3348. All that being said, I’ve not yet had time to read the amended complaint. I will update this post a final time when I get a final answer.