The Volokh Conspiracy
Mostly law professors | Sometimes contrarian | Often libertarian | Always independent
Our Amici Brief in the Student Loan Forgiveness Cases
arguing against standing, even though the program is unlawful.
Co-blogger Sam Bray and I have just filed an amici brief in Biden v. Nebraska, the Supreme Court student loan forgiveness case, taking what I suspect is a unique position among any of the public filings. Here is the introduction to our brief:
Amici believe that the administration's student loan forgiveness program is unlawful. But even if the executive branch has exceeded its authority under Article II, that does not permit the judicial branch to exceed its authority under Article III. "The case-or-controversy doctrines state fundamental limits on federal judicial power in our system of government." Allen v. Wright, 468 U.S. 737, 750 (1984). Any executive overreach is troubling. But "[t]here is no reason to magnify the separation-of-powers dilemma . . . by letting Article III judges—like jackals stealing the lion's kill—expropriate some of the power that [the Executive] has wrested from [Congress]." FCC v. Fox Television Stations, Inc., 556 U.S. 502, 525-26 (2009) (plurality opinion).
The standing theories that have been thrown at the wall in these cases are wrong, and many of them would have dangerous implications. Each theory falters on several grounds, but amici focus this brief on three points.
First, when it comes to standing, the critical question is who is the "proper party" to sue. This inquiry has been framed in different ways but the central aim is to ensure that the person most affected by the challenged action is before the court. Applying that principle here, Missouri has no standing to complain about the loan servicing fees that the Missouri Higher Education Loan Authority (MOHELA) might lose. Missouri set up MOHELA as a separate legal and financial entity, with the power to sue and be sued. MOHELA is far and away the most interested plaintiff, with Missouri's claims being merely derivative of MOHELA's. MOHELA has chosen not to bring a lawsuit, and as the "proper party" to the suit, its decision ought to carry the day.
Second, there is danger in countenancing extravagant theories of state standing that have exploded in the wake of this Court's decision in Massachusetts v. EPA, 549 U.S. 497 (2007). In the last decade, state attorneys general have relied on that case's underexplained language about "special solicitude," see id. at 520, producing a barrage of suits with tenuous standing theories against administrations of the opposing political party. Overbroad readings of that case should be forcefully rejected by this Court, lest state standing be allowed to transform the role of the federal judiciary.
Third, there is a fundamental disconnect between the states' weak claim for standing and the broad remedy they obtained—a national injunction. That disconnect is incompatible with the traditional limits of equitable jurisdiction and with this Court's instruction that standing must be demonstrated for each form of relief. The Court has not granted review specifically on the scope of the injunction, and may not wish to consider all aspects of that question in this case. But the scope of the relief is relevant, whether as part of the standing inquiry or as part of the broader questions of judicial power the Court should consider. Not only did the states seek and obtain a national injunction—a remedy lacking any traditional basis in equity—but they obtained this exceedingly broad remedy with an unusually weak basis for standing. That combination is at odds with basic principles of standing and equity jurisprudence that are applicable in the federal courts.
A few other excerpts below:
On judicial power and the "proper party," (with great thanks to Woolhandler and Nelson):
A. Article III Standing Requires The Proper Party To Bring Suit
Distilled to its core, "[t]he fundamental inquiry that standing derives from is who is a 'proper party' to a given lawsuit." William Baude, Standing in the Shadow of Congress, 2016 Sup. Ct. Rev. 197, 228 (2017); see Ann Woolhandler & Caleb Nelson, Does History Defeat Standing Doctrine, 102 Mich. L. Rev. 689, 695 (2004) ("The concept of proper parties is central to standing doctrine, and it may also infuse notions of a 'Case.'"). When the proper party is bringing the lawsuit, courts can act judicially, and are not transformed into "publicly funded forums for the ventilation of public grievances or the refinement of judicial understanding." Valley Forge Christian Coll. v. Americans United for Separation of Church & State, Inc., 454 U.S. 464, 473 (1982).
The "proper party" inquiry is deeply rooted in the courts. "[E]arly American courts did not use the term 'standing' much . . . . But eighteenth- and nineteenth-century courts were well aware of the need for proper parties . . . ." Woolhandler & Nelson, supra, at 691. This principle "cut across various causes of action," and was understood both as a general principle of law and equity and as a constitutional principle. Id. at 692. So to ask whether the plaintiffs have standing to challenge executive action is to ask whether any of them is the "proper party," in the constitutional sense.
In a similar vein, modern standing doctrine frequently depends on whether the plaintiff is the right one to sue, relatively speaking. The underpinning of many modern standing decisions, argues Professor Richard Re, is the "most interested plaintiff rule." Richard M. Re, Relative Standing, 102 Geo. L.J. 1191, 1196 (2014). Standing often is "made available on a relative basis," taking into account "where the particular plaintiff before the court stands as compared" to other potential plaintiffs, id. at 1195-96, with standing often being awarded to "plaintiffs with the greatest stake in obtaining the requested remedy," id. at 1196. For instance, in Clapper the Court denied standing and concluded its analysis by pointing to other plaintiffs who would have "a stronger evidentiary basis for establishing standing than do respondents in the present case." 568 U.S. 398, 421-22 (2013). Though not the only basis for denying standing, the Court's decision to draw attention to this point reflects the continuing influence of the fundamental principle of proper parties.
Whether under modern doctrine or more classical terminology, the federal courts have the power to issue the requested relief only if it is being requested by the correct plaintiffs. In this respect, "standing also reflects a due regard for the autonomy of those persons likely to be most directly affected by a judicial order." Valley Forge, 454 U.S. at 473. . . .
B. Missouri Is Not The Proper Party To Bring This Suit
The strongest argument for standing made by any of the plaintiffs in these cases is the state of Missouri's argument that it has standing to challenge the loan forgiveness program because MOHELA is a state entity that will lose loan servicing fees if federal student loans are forgiven.
But the state of Missouri is not the "proper party" to bring this lawsuit. MOHELA was established with financial and legal independence from the state of Missouri. For starters, MOHELA has the power "[t]o sue and be sued . . . in any court having jurisdiction of the subject matter and of the parties." Mo. Rev. Stat. § 173.385.1(3). In earlier litigation, MOHELA conceded that Missouri is not legally liable for any judgments against it. Dykes v. MOHELA, No. 4:21-CV-00083, 2021 WL 3206691, at *3 (E.D. Mo. July 29, 2021). . . .
As to MOHELA's assets, none are "considered to be part of the revenue of the state"; none are "subject to appropriation by the general assembly"; and, other than what MOHELA is required to contribute to the Lewis and Clark discovery fund, none "shall be required to be deposited into the state treasury." Id. § 173.425. That is, "the vast majority of MOHELA's funds are segregated from state funds and controlled exclusively by MOHELA." Dykes, 2021 WL 3206691, at *4.
The parties have discussed MOHELA partly through the "arm of the state" doctrine. It is disputed whether, under various multifactor tests, these facts would be sufficient to establish that MOHELA is not an "arm of the state" for the purposes of sovereign immunity. But under the more traditional approach "prevailing until the 1970s," which was described by Judge Stephen Williams, the fact that MOHELA has the capacity to sue and be sued would establish that it is not an arm of the state. See Puerto Rico Ports Auth. v. Fed. Mar. Comm'n, 531 F.3d 868, 881 (D.C. Cir. 2008) (Williams, J., concurring). Perhaps that insight from Judge Williams should be enough to resolve the standing inquiry as well.
But even putting aside how the "arm of the state" doctrine is formulated, MOHELA, not Missouri, is the proper party in this case. Any dispute about the loan cancellation is between MOHELA and the federal executive, and not between the state of Missouri and the federal executive. MOHELA's ability to sue and be sued means that it can vindicate its own injuries if it chooses. To the extent that the loss of servicing fees is a cognizable injury, MOHELA is far and away the most interested plaintiff, and Missouri's claim is entirely derivative. For whatever reason—whether politics or mission or something else—MOHELA has chosen not to do so, and the federal courts should be skeptical of another party's attempt to force that interest into federal court.
Additionally, it is salient that MOHELA alone is responsible for any judgment against it, and that it alone is the direct beneficiary of any judgment for it. Who would be bound or benefitted by the judgment was another central question in the proper party inquiry, especially when the government was litigating. Woolhandler & Nelson, supra, at 723-24. MOHELA's ability to vindicate its own injuries, buttressed by its financial independence regarding judgments, demonstrates that MOHELA, not Missouri, is the "proper party" to bring this suit.
And on the more general problem of state standing (which is discussed in more detail beyond this excerpt):
The states have put forward other, vaguer, theories of standing. Those theories are both weaker as a matter of law and more dangerous if accepted. The states' more extravagant theories are emblematic of the broader trend where states are taking advantage of vague language in Massachusetts v. EPA, 549 U.S. 497 (2007), to challenge any federal action with which they disagree. Unless this Court wishes to sit in constant judgment of every major executive action—which is not its constitutional role—it is time to say "stop." . . .
In the years since Massachusetts v. EPA, the number of lawsuits brought by state attorneys general challenging actions by the federal government has skyrocketed. See generally Paul Nolette & Colin Provost, Change and Continuity in the Role of State Attorneys General in the Obama and Trump Administrations, 48 Publius 469, 473-74 (2018), https://doi.org/10.1093/publius/pjy012 (noting a dramatic rise in such lawsuits during the Obama and Trump administrations). The pattern has become familiar and predictable. When a Republican administration is in power, attorneys general from Democratic states line up (most often as a group) to challenge any politically controversial act by the federal government; and when a Democratic administration is in power, the roles are reversed. Republican state attorneys general initiated around 50 lawsuits against the Obama Administration; Democratic state attorneys general initiated over 130 lawsuits against the Trump Administration; and Republican state attorneys general have already initiated close to 50 lawsuits against the Biden Administration.
The Court is familiar with this dynamic, as states have repeatedly pressed extreme theories of standing, pointing to the "special solicitude" they are due. See, e.g., United States v. Texas, No. 22-58. It is almost as though states have been proceeding on the assumption that Massachusetts v. EPA somehow announced "a bright-line rule that states always have standing to sue the federal government." Bradford Mank & Michael E. Solimine, State Standing and National Injunctions, 94 Notre Dame L. Rev. 1955, 1969 (2019). Whether the Court wishes to officially abandon Massachusetts v. EPA, or simply to clarify its limits, the Court should not resolve this case in a way that encourages this dynamic.
Part III of the brief goes on to talk about equitable remedies, the national injunction, and more:
"Equity is essentially a system of remedies." D. E. C. Yale, Introduction, to Lord Nottingham's "Manual of Chancery Practice" and "Prolegomena of Chancery and Equity" 16 (D.E.C. Yale ed., 1965). But the potency of equitable remedies has consequences for the circumstances in which courts will grant them. In particular, equity has never had a sharp disjuncture between what it takes to get into equity (broadly, "standing") and what the plaintiff can get out of equity (broadly, "remedies"). The plaintiff's grievance and the plaintiff's remedy are instead connected. The broader and more intense the relief requested, the stronger the plaintiff's showing of harm must be. These principles of traditional equity have a counterpart in the Article III requirement that "'a plaintiff must demonstrate standing . . . "for each form of relief" that is sought.'" Davis v. FEC, 554 U.S. 724, 734 (2008) (citation omitted).
The states' basis for standing in these cases is especially tenuous, while the remedy they sought and obtained—a national injunction—is especially broad. Whether viewed from the perspective of equitable principles or the requirement of standing for each form of relief, plaintiffs utterly lack standing for the remedy they received.
The whole brief is here.
Thanks very much to Melissa Arbus Sherry and Uriel Hinberg at Latham and Watkins for representing us, and I hope the brief is of some use to the litigation.
