The 9th Circuit Erred Again: Youngstown does not support the existence of an "equitable ultra vires cause of action"

The steel mill owners had a concrete, property interest that was impaired by the government's actions. The plaintiffs did not rely on a generalized allegation of ultra vires action by the Secretary of Commerce.

Today the 9th Circuit decided Sierra Club v. Trump. In this case, the environmental group challenged the Trump administration's transfer of appropriated funds to construct a border wall. The 9th Circuit previously upheld a district court injunction in this case. However, the Supreme Court stayed that ruling by a 5-4 vote. The per curiam order explained:

Among the reasons is that the Government has made a sufficient showing at this stage that the plaintiffs have no cause of action to obtain review of the Acting Secretary's compliance with Section 8005.

At the time, Seth Barrett Tillman and I wrote a lengthy post explaining why the Plaintiffs lacked an equitable cause of action to challenge ultra vires action. This analysis was based on our work on the Foreign Emoluments Clause. In that litigation, the Plaintiffs have also asserted a general equitable cause of action to challenge illegal government conduct. (Judge Wilkinson's recent dissent eviscerates this position.)

On remand, the Ninth Circuit held that the plaintiffs do in fact have "an equitable ultra vires cause of action to challenge the Federal Defendants' transfer." This opinion is flawed on several grounds.

First, the court conflates illegal conduct with the ability to challenge illegal conduct in court. The panel writes:

Equitable actions to enjoin ultra vires official conduct do not depend upon the availability of a statutory cause of action; instead, they seek a "judge-made remedy" for injuries stemming from unauthorized government conduct, and they rest on the historic availability of equitable review….The relief Sierra Club requests has been traditionally available. "The ability to sue to enjoin unconstitutional actions by state and federal officers is the creation of courts of equity, and reflects a long history of judicial review of illegal executive action, tracing back to England." Armstrong.

This mistake is all too common. We explained in our prior post:

The constitutional claims in the Wall litigation, as well as in the Emoluments Clauses cases, cannot invoke the equitable jurisdiction of the federal courts. Why? In order to invoke a federal court's equitable jurisdiction, Plaintiffs cannot simply assert in a conclusory fashion that the conduct of federal officers is ultra vires, and, on that basis, seek equitable relief. "Equity" cannot be used as a magic talisman to transform the plaintiffs into private attorneys general who can sue the government merely for acting illegally. Rather, in order to invoke the equitable jurisdiction of the federal courts, plaintiffs must put forward a prima facie equitable cause of action.

Second, Armstrong v. Exceptional Child Center, Inc. does not support the Plaintiffs' claim. We wrote:

For example, in Armstrong v. Exceptional Child Center (2015), the Supreme Court rejected the proposition that "the Supremacy Clause creates a cause of action for its violation" in the federal court's equitable jurisdiction.

Plaintiffs in the Emoluments Clauses cases repeatedly cite Armstrong, but fail to note that this case cuts against their free-floating claim to an equitable cause of action based on a purported constitutional violation.

Third, the panel misreads the nature of the cause of action in Youngstown. The panel writes:

That Sierra Club has a cause of action to enjoin the unconstitutional actions at issue here is best illustrated by Youngstown. There, Congress passed numerous statutes authorizing the President to take personal and real property under specific conditions. 343 U.S. at 585–86. During the Korean War, however, President Truman signed an executive order seizing most of the nation's steel mills, even though the conditions of the statutes had not been satisfied as a matter of fact. Id. at 582, 586. It fell to the Supreme Court to determine whether the President had constitutional authority to seize the steel mills—it held he did not and affirmed the district court injunction. Id. at 588–589. The Court never questioned that it had the authority to provide the requested relief.

Youngstown did not involve a free-floating equitable claim. In this seminal separation-of-powers case, the federal government seized control of private steel mills. The action was brought by the mills' owners. Youngstown's brief explained its cause of action:

A simple cloud on title has always moved equity to grant relief because no other remedy is complete or adequate. Wickliffe v. Owings, 17 How. 47, 50 (1854); Southern Pacific v. United States, 200 U. S. 341, 352 (1906); Ohio Tax Cases, 232 U. S. 576, 587 (1914); Shaffer v. Carter, 252 U. S. 37, 48 (1920). The seizure of the properties and business of the plaintiffs, with its host of uncertainties and legal and practical problems arising from the ambiguous position in which the owners are left, should appeal to equity at least as strongly as a cloud on title. In these circumstances, any remedy at law would necessarily be inadequate.

The cause of action was based on the government's regulation of real property–the steel mills. We explained:

The steel mill owners had a concrete, property interest that was impaired by the government's actions. The plaintiffs did not rely on a generalized allegation of ultra vires action by the Secretary of Commerce; instead, they relied on an analogous cause of action to quiet title–their title to their property. Here too, we are in the heartland of historical equity jurisdiction involving disputed property rights.

Youngstown does not support the Sierra Club's claim.

The Ninth Circuit's errors here are plain. The Supreme Court should issue another stay.