United States District Court, District of Columbia
HEALTHY FUTURES OF TEXAS, individually and on behalf of all others similarly situated, Plaintiff,
v.
DEPARTMENT OF HEALTH AND HUMAN SERVICES, et al., Defendants.
MEMORANDUM OPINION
KETANJI BROWN JACKSON UNITED STATES DISTRICT JUDGE
Before
this Court at present are ripe cross-motions for summary
judgment in the instant class action, which involve legal
claims that are indistinguishable from the dispute that this
Court recently considered and resolved in Policy and
Research, LLC v. HHS, No. 18-cv-346, 2018 WL 2184449,
(D.D.C. May 11, 2018). (See Pl.'s Mot. for Summ.
J. on the Individual and Class Claims, ECF No. 7, at 12-16;
Defs.' Cross-Mot. to Dismiss or for Summ. J., ECF No. 18,
at 18-28.)[1] In fact, the only new issue that has
arisen in the context of the summary judgment motions at
issue here is HHS's contention that the equitable
doctrine of laches bars Healthy Futures of Texas
(“Healthy Futures”) and the other class members
(collectively “Plaintiffs”) from filing their
lawsuit now-some ten months after the challenged
agency action, and more than two months after Policy and
Research, LLC and other similarly situated plaintiffs filed
lawsuits asserting identical claims in federal districts
across the country.[2]
For the
reasons explained below, this Court rejects HHS's laches
argument, and it also finds no reason to depart from its
conclusion that (1) the termination provisions of HHS's
regulations apply to the agency's unexplained decision to
“shorten” the project periods for the grants it
had awarded to the class members under the Teen Pregnancy
Prevention Program (“TPPP”), such that this
decision is not committed to agency discretion by law,
see Policy & Research, LLC, 2018 WL 2184449, at
*7-12, and (2) HHS acted arbitrarily and capriciously in
violation of the Administrative Procedure Act
(“APA”), 5 U.S.C. § 706(2)(A), because it
terminated Plaintiffs' project periods without providing
any explanation for this action and without complying with
its own regulations, Policy & Research, LLC,
2018 WL 2185559, at *13. Accordingly, Plaintiffs' motion
for summary judgment is GRANTED,
Defendants' cross-motion to dismiss and for summary
judgment is DENIED, and HHS's decision
to shorten these project periods will be
VACATED. A separate Order that requires HHS
to accept and process the class members' noncompeting
continuation applications to the same extent and in the same
manner as before the agency decided to “shorten”
the project periods for grants made under the TPPP will
follow.
I.
THE LACHES DISPUTE
HHS
contends that Healthy Futures and the class members it
represents unreasonably delayed the filing of the instant
lawsuit (which challenges agency action that occurred last
summer), and it further maintains that HHS would be
prejudiced if Plaintiffs' belated request for an
injunction is granted, because HHS is currently engaged in
the expensive, labor-intensive process of awarding the
contested TPPP grant funds to other organizations through a
recompetition process. (See Defs.' Mem. in
Opp'n to Pl.'s Mot. for Summ. J. & in Supp. of
Their Cross-Mot. to Dismiss or for Summ. J.
(“Defs.' Mem.”), ECF No. 18-1, at 14-18.) In
this regard, HHS emphasizes the following “factual
circumstances, ” which, in the agency's view,
render the April 27, 2018 filing of the instant action
“unreasonable[.]” (Id. at 15.) First of
all, HHS points out that the agency's
“announcement” that each of the class
members' project periods was being shortened, effective
June 30, 2018, and “was made ten months ago.”
(Id. at 16.) Moreover, “[e]ven after [other]
grantees began filing lawsuits to challenge HHS's
decision, Healthy Futures (and the putative class it
represents) waited another two-and-a-half months
before seeking to assert its rights.” (Id.
(emphasis added); see also id. (decrying this delay
as “not reasonably expeditious behavior”
(internal quotation marks and citation omitted)).) HHS also
highlights the fact that the class claims involve
“government grants and contracts”-a context in
which “expedient assertion of claims is vital.”
(Id. at 15 (citing LTMC/Dragonfly, Inc. v.
Metro. Wash. Airports Auth., 699 F.Supp.2d 281, 293
(D.D.C. 2010)).)
HHS
further insists that it would “unfairly
prejudice” the agency to allow this case to proceed
now. (Id. at 16.) This is because, while the class
members purportedly dithered over instigating legal action to
protect their interests, the agency “spent a year
analyzing the [TPPP] and developing a new approach to the
program at a cost to the agency of millions of dollars and
many house of staff time.” (Id. at 16-17.)
Pursuant to these efforts, HHS recently announced that the
grant funding that Plaintiffs seek to preserve with this
lawsuit will be competitively redistributed, so HHS argues
here that the “requested relief interferes with the
recompetition” both “by reducing the funds
available to the agency to award to new grantees and
diminishing HHS's investment in reviewing and redesigning
the TPP Program[, ]” and also by thwarting the
legitimate expectations of the members of the public who will
“commit resources to participate in that
recompetition.” (Id. at 17.) Thus,
notwithstanding the fact that other TPPP grantees had
launched several (ultimately successful) lawsuits challenging
HHS's decision to cut the previous round of TPPP grant
awards short prior to the time that the agency announced the
recompetition, HHS maintains that it had “good reason
to believe” that these grantees' alleged
rights to the funding “had been abandoned” during
the ten months that elapsed between the agency's decision
to shorten Plaintiffs' project period and the class
action lawsuit that Healthy Futures filed in this Court.
(Id. at 18 (internal quotation marks and citation
omitted)); see also Id. at 16 (“When a
litigant creates an impression of acquiescence that has led
others to make substantial financial commitments, laches
should apply to defeat the claim.” (internal quotation
marks and citation omitted)).)
On
behalf of the class it represents, Healthy Futures vigorously
disputes HHS's assertion of laches. (See
Pl.'s Reply Mem. in Further Supp. of Mot. for Summ. J.
& Mem. in Opp'n to Defs.' Cross-Mot. to Dismiss
or for Summ. J. (“Pl.'s Reply”), ECF No. 22,
at 6-11.) For one thing, Healthy Futures disagrees with the
agency's contention that there was an unreasonable delay
with respect to the filing of this lawsuit, and it does so
largely by pointing to certain facts and circumstances that
existed at the time that HHS's decision to shorten the
TPPP grants was made, which the organization says
demonstrably influenced the timing of its response during the
ten months prior to the filing of its action. (See
Id. at 6-8.) Specifically, Healthy Futures notes that
“HHS's budget request for fiscal year 2018 proposed
to eliminate the TPPP in May 2017, and Congress did not pass
a 2018 funding bill rejecting that proposal under March 23,
2018.” (Id. at 6.)[3] With respect to the
agency's contention that the instant action should be
deemed untimely on equitable grounds, Healthy Futures argues
that filing this lawsuit five weeks after the time that
Congress rejected HHS's elimination request “can
hardly be deemed a delay, let alone an unreasonable
one.” (Id. at 7.) Healthy Futures also urges
the Court to disregard HHS's suggestion “that delay
should be measured from the filing of the four prior
lawsuits[, ]” because the agency “offers no
support for the notion that a lawsuit becomes untimely, as an
equitable matter, when it post-dates the filing of similar
suits by two months and the decisions in those suits by a few
days.” (Id.)
As to
prejudice, Healthy Futures maintains that any such allegation
by the agency is “implausible because HHS's
decision [to stop funding the existing TPPP grants] has been
contested from the start.” (Id. at 8.) That
is, according to Healthy Futures, various TPPP grantees took
swift action to express their dissatisfaction with HHS's
decision to shorten these grant awards soon after the agency
announced that decision; these actions included writing
letters to the agency, “attempting to appeal the
decision” through the administrative process, and
encouraging House and Senate members to inquire about this
HHS's decision. (Id.) In addition, on February
15, 2018, “nine grantees filed lawsuits
challenging” this agency's decision. (Id.
at 9.) Therefore, Healthy Futures argues that HHS was fully
aware of the TPPP grantees' claims prior to its April 20,
2018 announcement that the funding would be recompeted
(see id.), and “at no point did HHS have
reason to rely on an impression of acquiescence” to its
decision; indeed, “HHS developed the new [recompetition
announcements] in light of the possibility of challenges to
the termination of the TPPP grants and issued them in the
midst of such litigation.” (Id. (internal
quotation marks omitted).)
This
Court heard from the parties regarding HHS's laches
argument, among other things, during a status conference that
it held in this matter on May 21, 2018. The parties'
cross-motions for summary judgment became ripe on May 30,
2018.
II.
LEGAL STANDARDS
The
legal standards applicable to motions for summary judgment in
APA cases are set forth in this Court's Policy and
Research, LLC opinion. See 2018 WL 2184449 at
*6. These are the standards that this Court has applied to
rule on the summary judgment motions that are presented here.
With
respect to laches, it is important to note that
“[l]aches is ‘a defense developed by courts of
equity' to protect defendants against
‘unreasonable, prejudicial delay in commencing
suit.'” SCA Hygiene Prods. Aktiebolag v. First
Quality Baby Prods., LLC, 137 S.Ct. 954, 960 (2017)
(quoting Petrella v. Metro-Goldwyn-Mayer,
Inc., 134 S.Ct. 1962, 1967, 1973 (2014)). The
doctrine is “founded on the notion that equity aids the
vigilant and not those who slumber on their rights” and
thereby permit “pertinent evidence [to] become[]
lost” or “equitable boundaries [to] blur as
defendants invest capital and labor into their claimed
property.” NAACP v. NAACP Legal Def. & Educ.
Fund., Inc., 753 F.2d 131, 137 (D.C. Cir. 1985). It also
serves to prevent plaintiffs from gaining “the unfair
advantage of hindsight while defendants suffer the
disadvantage of an uncertain future outcome.”
Id. If the doctrine applies in a given case, a
plaintiff will be barred from pursuing “claims of an
equitable cast[.]” Petrella, 134 S.Ct. at
1973.
Significantly
for present purposes, the application of “[l]aches does
not depend solely on the time that has elapsed between the
alleged wrong and the institution of suit; it is principally
a question of the inequity of permitting the claim to be
enforced-an inequity founded upon some change in the
condition or relations of the property or the parties.”
Gull Airborne Instruments, Inc. v. Weinberger, 694
F.2d 838, 843 (D.C. Cir. 1982) (internal quotation marks and
citation omitted). Thus, to establish a successful laches
defense, the party asserting the defense must show “(1)
[a] lack of diligence by the party against whom the defense
is asserted, and (2) prejudice to the party asserting the
defense[, ]” Nat'l R.R. Passenger Corp. v.
Morgan, 536 U.S. 101, 122 (2002), and “[t]he
amount of prejudice required in a given case varies with the
length of the delay[, ]” Pro-Football, Inc. v.
Harjo, 565 F.3d 880, 884 (D.C. Cir. 2009). In other
words, “[i]f only a short period of time elapses
between accrual of the claim and suit, the magnitude of
prejudice required before suit would be barred is
great[.]” Id. (quoting Gull Airborne
Instruments, 694 F.2d at 843).
Because
the laches inquiry necessarily requires the district court to
“weigh [] both the length of delay and the amount of
prejudice, it leaves the district court very broad discretion
to take account of the particular facts of particular
cases.” Id. at 885. Thus, whether or not
laches applies is necessarily a holistic and fact-bound
determination. And there is nothing about the nature of a
class action lawsuit that makes the defense of laches
inapplicable to the claims of the class representative or
class members, so when laches is raised to defend against
claims in that context, the Court must engage in the
necessary holistic evaluation of the facts in those cases as
well. See, e.g., Does I through III v. District
of Columbia, 232 F.R.D. 18, 32 (D.D.C. 2005),
rev'd in part, vacated in part on other grounds sub
nom. Doe ex rel. Tarlow v. ...