On The Case

How an obscure SCOTUS employment ruling put the brakes on DACA rollback

(Reuters) - U.S. Supreme Court precedent has a way of turning up in the most unexpected places. The latest example: A blockbuster immigration ruling on Tuesday turns on the Supreme Court’s 2016 decision about whether service advisers at a Mercedes-Benz dealership are entitled to sue for overtime.

As President Trump and congressional lawmakers debate the future of nearly 700,000 so-called Dreamers - young men and women whose parents brought them to this country as children without documentation - U.S. District Judge William Alsup of San Francisco took the reins on Tuesday night, issuing a nationwide preliminary injunction that temporarily blocks the Trump administration from rescinding the Obama-era Deferred Action for Childhood Arrivals policy.

Judge Alsup’s ruling means that people who have already enrolled in DACA to obtain work permits and Social Security numbers will no longer face the risk of deportation as of March 5, the date the Trump administration had designated for the end of the program. The plaintiffs in the case, which was originally filed by Covington & Burling for the Regents of the University of California and has come to include dozens of other plaintiffs from across the country, have said they believe Congress, not the courts, will ultimately decide the status of the Dreamers. But Alsup’s injunction changes the timetable and, said Covington partner Jeff Davidson, who argued for the plaintiffs at the injunction hearing, “will protect the nearly 800,000 DACA recipients against deportation or losing their jobs.”

In broad terms, the judge conducted a two-step analysis. He first had to decide that the Trump administration’s DACA rescission was subject to the court’s authority, rather than a policy not subject to judicial review. Essentially, Judge Alsup concluded that because the Department of Homeland Security invoked DACA’s supposed illegality as justification for terminating the program, the courts have jurisdiction to review the determination of illegality.

“In sum, the new administration didn’t terminate DACA on policy grounds. It terminated DACA over a point of law, a pithy conclusion that the agency had exceeded its statutory and constitutional authority,” Judge Alsup wrote. “But determining illegality is a quintessential role of the courts.”

Once he decided he had authority to review the Trump administration’s DACA rescission, the judge determined that the policy of deferring enforcement of deportation law to allow Dreamers to remain in this country is, in fact, legal – and the Trump administration’s rescission of the policy was arbitrary and capricious.

The judge acknowledged that the 5th U.S. Circuit Court of Appeals struck down a parallel Obama-era policy deferring deportation of some undocumented parents of children who are American citizens – a ruling Attorney General Jeff Sessions cited when he announced his conclusion that DACA illegally abrogates congressional power. But Judge Alsup said the 5th Circuit’s reasoning on the parallel program, known as DAPA, “was not a death knell for DACA” because of key differences between the two programs: DACA, according to Alsup, is smaller than DAPA, allows for discretion on individual applicants and has no existing alternative in immigration law.

The judge said the executive branch is entitled to set immigration enforcement priorities. Presidents dating back to Dwight Eisenhower, according to Judge Alsup, have adopted policies to defer deportation of certain groups of people, and Congress has tacitly conceded the executive branch’s right to do so. The judge seemed to find persuasive a 2014 memo from the Obama Justice Department’s Office of Legal Counsel (OLC), which said that deferred action programs like DACA are permitted “so long as immigration officials retain discretion to evaluate each application on an individualized basis and so long as the concerns animating the program were consistent with the types of concerns that have customarily guided the exercise of immigration enforcement discretion,” the judge wrote. “As explained in OLC’s opinion, each feature of the DACA program is anchored in authority granted or recognized by Congress or the Supreme Court.”

To review: Judge Alsup found that he had jurisdiction to review the legality of DACA rescission and concluded that the Trump administration wrongly characterized the program as an illegal abuse of the executive branch’s power. So where, you are doubtless wondering, do the Mercedes-Benz dealership employees and their overtime figure in?

In the determination that the Trump administration’s cancellation of DACA was arbitrary and capricious, of course!

In 2016’s Encino Motorcars v. Navarro, the Supreme Court considered whether the Department of Labor improperly adopted a 2012 rule that allowed auto dealership service advisers, who sell maintenance and repair services, to claim overtime, even though car salespeople are exempted. DOL’s 2012 rule upended the agency’s decades-long policy of exempting service advisers from the Fair Labor Standards Act’s overtime requirements.

The justices concluded, in an opinion written by Justice Anthony Kennedy, that federal agencies are free to change their policies – but not without providing a good reason for changing longstanding expectations. “One basic procedural requirement of administrative rulemaking is that an agency must give adequate reasons for its decisions,” the Encino Motorworks opinion said. “Where the agency has failed to provide even a minimal level of analysis, its action is arbitrary and capricious and so cannot carry the force of law.”

The opinion pointed out that people and businesses rely on the rules federal agencies have made. Before agencies upend those rules, the Supreme Court said, they must take into account the impact their new policies will have on those who relied in good faith on the old rules. When agencies fail to engage in that analysis, the court said, their rulemaking doesn’t merit deference.

Judge Alsup said the Trump administration didn’t account for the interests of the hundreds of thousands of Dreamers who have enrolled in DACA since the program began in 2012. “The administrative record is utterly silent in this regard,” he wrote. “The agency reversed over five years of DHS policy, did so only one day after the Attorney General’s letter, and did so just three months after (DHS) Secretary Kelly had continued the program…. The record includes no consideration to the disruption a rescission would have on the lives of DACA recipients, let alone their families, employers and employees, schools and communities.”

Under Encino Motorworks precedent, Judge Alsup said, the government’s failure to consider the impact of its policy change on the people who relied on the old rules was fatal. Agencies need not prove in court that the new rule is better than the old one, Judge Alsup said. But when an agency “abruptly changes course and terminates a program on which so many people rely,” it has to provide a detailed justification.

It’s impossible to predict how the Supreme Court will rule on the rights of DACA participants if Judge Alsup’s decision comes before the justices. But six justices in the Encino case endorsed the idea that federal agencies have to account for the real-life impact of policy changes. That’s good law for the Dreamers.