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STUART F. DELERY Acting Assistant Attorney General ANDRE BIROTTE JR. United States Attorney JUDRY L. SUBAR Assistant Branch Director ELISABETH LAYTON Senior Counsel KAREN S. BLOOM Trial Attorney U.S. Department of Justice Civil Division Federal Programs Branch 20 Massachusetts Ave., N.W. Washington, DC 20001 T: (202) 514-3183; F: (202) 616-8470 Email: Elisabeth.Layton@usdoj.gov Attorneys for Defendants UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA GREGORY VALENTINI, et al., Plaintiffs, v. ERIC SHINSEKI, et. al., Defendants. ) ) ) ) ) ) ) ) ) ) ) Case No. 11-CV-04846 SJO (MRWx) DEFENDANTS NOTICE OF MOTION AND MOTION FOR SUMMARY JUDGMENT; MEMORANDUM OF POINTS AND AUTHORITIES AND SUGGESTION OF LACK OF JURISDICTION [NO HEARING DATE SET] [Before the Honorable S. James Otero]

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NOTICE OF MOTION AND MOTION FOR SUMMARY JUDGMENT PLEASE TAKE NOTICE that pursuant to the Courts February 13, 2013 Order (ECF No. 111), Defendants Eric Shinseki, Secretary of the Department of Veterans Affairs (VA), and Donna M. Beiter, Director of the VA Greater Los Angeles Healthcare System, by and through their undersigned counsel, hereby move the Court for summary judgment pursuant to Federal Rule of Civil Procedure 56(a). This motion is based on the attached Memorandum of Points and Authorities and Suggestion of Lack of Jurisdiction, the Declaration of Elisabeth Layton, the Administrative Record previously filed (ECF Nos. 96, 98, 112, 115), and such other and further arguments and grounds as may be advanced in the future. This motion is made following a conference of counsel as required by Local Rule 7-3, which took place on March 22, 2013. No hearing has been set in accordance with the Courts Order of February 13, 2013 (ECF No. 111). Should the Court require a hearing, a date will be set by the Court. Dated: April 10, 2013 Respectfully submitted, STUART F. DELERY Acting Assistant Attorney General ANDRE BIROTTE JR. United States Attorney LEON W. WEIDMAN Chief, Civil Division ALARICE M. MEDRANO Assistant United States Attorney JUDRY L. SUBAR Assistant Branch Director By: /s/ Elisabeth Layton

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ELISABETH LAYTON Senior Counsel KAREN S. BLOOM Trial Attorney U.S. Department of Justice Civil Division Federal Programs Branch 20 Massachusetts Ave., N.W. Washington, DC 20001 T: (202) 514-3183; F: (202) 616-8470 Email: Elisabeth.Layton@usdoj.gov Attorneys for Defendants

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2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 B. II. B.. C.

TABLE OF CONTENTS Page INTRODUCTION ..................................................................................................... 1 FACTUAL AND PROCEDURAL BACKGROUND .............................................. 2 ARGUMENT ............................................................................................................. 3 I. VAS ACTIONS ARE UNREVIEWABLE BECAUSE THEY ARE COMMITTED TO AGENCY DISCRETION ..................................... 3 A. The Language of 8153 Shows The Decisions to Enter ESAs Are Committed To VAs Discretion. ................................................ 6 The Statutory Framework and Legislative History Show VA Decisions to Enter ESAs Are Committed to VAs Discretion. .. 8 ESA Decisions Are Typical of Actions Committed to Agency Discretion. ................................................................. 10

EVEN IF VAS DECISIONS ARE REVIEWABLE, THEY DO NOT VIOLATE THE EPA. .......................................................................... 12 A. VA Acted In Accordance With Law In Entering Into Medical Space Sharing Agreements at its WLA Campus. ...................... 13 1. VAs Reading of Section 8153 Must Be Accorded Deference ............................................................................. 14 2. VAs Interpretation Of Its Authority Under 8153 Is Permissible. ........................................................................... 16 VAs Decisions To Enter ESAs Are Supported by the Administrative Record, Which Shows That Decisions Were Rationally Based On Relevant Factors. ..................................... 21

CONCLUSION ......................................................................................................... 24

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TABLE OF AUTHORITIES CASES Akiak Native Cmty v. U.S. Postal Serv., 213 F.3d 1140 (9th Cir. 2000) ...............................................................................21 Alaska Dep't of Envtl. Conserv. v. EPA, 540 U.S. 461 (2004) ..............................................................................................12 Am. Fed'n of Gov't Empls. v. Brown, 680 F.2d 722 (11th Cir. 1982) ...............................................................................16 Arent v. Shalala, 70 F.3d 610 (D.C. Cir. 1995) ................................................................................14 Barnhart v. Walton, 535 U.S. 212 (2002) ..............................................................................................15 Beno v. Shalala, 30 F.3d 1057 (9th Cir. 1994) ...................................................................................6 Cape Cod Hosp. v. Sebelius, 630 F.3d 203 (D.C. Cir. 2011) ....................................................................... 19, 20 Chevron U.S.A., Inc. v. Nat'l Res. Def. Council, 467 U.S. 837 (1984) ....................................................................................... 14, 15 County of San Francisco v. United States, 443 F. Supp. 1116 (N.D. Cal. 1977) .....................................................................12 Drakes Bay Oyster Co. v. Salazar, No. 12-cv-06134-YGR, 2013 WL 451860 (N.D. Cal. Feb. 4, 2013) ...................11 E.J. Friedman Co. v. United States, 6 F.3d 1355 (9th Cir. 1993) .................................................................................4, 6 Ellison v. Connor, 153 F.3d 247 (5th Cir. 1998) ...................................................................................7
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Forsyth Cnty. v. Army Corps of Eng'rs, 633 F.3d 1032 (11th Cir. 2011) ...............................................................................7 Gibbons v. Fronton, 533 F. Supp. 2d 449 (S.D.N.Y. 2008) ..................................................................11 Haig v. Agee,, 453 U.S. 290 (1981) ..............................................................................................18 Harkonen v. United States Dep't of Justice, No. C12-629 CW, 2012 WL 6019571 (N.D. Cal. Dec. 3, 2012) ............................5 Heckler v. Chaney, 470 U.S. 821 (1985) ..................................................................................... 4, 5, 10 Helgeson v. Bureau of Indian Affairs, 153 F.3d 1000 (9th Cir. 1998) .............................................................................5, 8 Johnston Oyster Co. v. Malcom Baldridge, 704 F.2d 1060 (9th Cir. 1983) ...............................................................................12 Levine v. Vilsack, 587 F.3d 986 (9th Cir. 2009) ...................................................................................4 Lincoln v. Vigil, 508 U.S. 182 (1993) ..............................................................................................10 Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) ................................................................................................4 Managed Pharmacy Care v. Sebelius, 705 F.3d 934 (9th Cir. 2012) .................................................................... 12, 16, 21 Marmolejo-Campos v. Holder, 558 F.3d 903 (9th Cir. 2009) .................................................................................17 Marsh v. Or. Natural Res. Council, 490 U.S. 360 (1989) ..............................................................................................12

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Morales-Izquierdo v. Gonzales, 486 F.3d 484 (9th Cir. 2007) .................................................................................21 Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto Ins. Co., 463 U.S. 29 (1983) ................................................................................................12 Natl Parks & Conservation Assn v. U.S. Dep't of Transp., 222 F. 3d 677 (9th Cir. 2000) ................................................................................13 Nat'l Wildlife Fed'n v. Burford, 871 F.2d 849 (9th Cir. 1989) .................................................................................23 Northwest Ecosystem Alliance v. U.S. Fish & Wildlife Serv., 475 F.3d 1136 (9th Cir. 2007) ...............................................................................13 Occidental Eng'g Co. v. INS, 753 F.2d 766 (9th Cir. 1985) ...................................................................................3 Pac. NW. Generating Coop. v. Bonneville Power Admin., 596 F.3d 1065 (9th Cir. 2010) .................................................................................5 Pinnacle Armor Inc., v. United States, 648 F.3d 708 (9th Cir. 2011) ...................................................................................5 Pritkin v. Dep't of Energy, 254 F.3d 791 (9th Cir. 2001) ...................................................................................4 Rank v. Nimmo, 677 F.2d 692 (9th Cir. 1982) ............................................................................ 6, 14 Rapanos v. United States, 547 U.S. 715 (2006) ..............................................................................................21 Rapides Reg'l Med. Center. v. Sec'y, Dep't of Veterans Affairs, 974 F.2d 565 (5th Cir. 1992) ...................................................................................8 Pharm. Research & Mfrs. of Am. v. Thompson, 259 F. Supp. 2d 39(D.D.C. 2003);. ................................................................ 15, 20

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Sierra Club v. Mainella, 459 F. Supp. 2d 76 (D.D.C. 2006) ..........................................................................3 Skidmore v. Swift & Co., 323 U.S. 134 (1944) ..............................................................................................16 Solid Waste Agency of N. Cook Cnty. v. Army Corps, 531 U.S. 159 (2001) ..............................................................................................21 Strickland v. Morton, 519 F.2d 467 (9th Cir. 1975) ...................................................................... 9, 10, 12 Topgallant Group., Inc. v. United States, 704 F. Supp. 265 (D.D.C. 1998) ...........................................................................11 U.S. v. Riverside Bayview Homes, Inc., 474 U.S. 121 (1985) ..............................................................................................21 United States v. Mead, 533 U.S. 218 (2001) ..............................................................................................16 Webster v. Doe, 486 U.S. 592 (1988) ............................................................................................5, 7 STATUTES 5 U.S.C. 701 .............................................................................................................4 5 U.S.C. 706 ............................................................................................... 1, 12, 14 38 U.S.C. 8101 ........................................................................................................9 38 U.S.C. 8151 ............................................................................................ passim 38 U.S.C. 8153 .............................................................................................. passim 38 U.S.C. 8161 ........................................................................................................2 38 U.S.C. 8162 ........................................................................................................2 38 U.S.C. 1718, 2013(a)(3) .................................................................................22

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REGULATIONS 38 CFR 17.142 .........................................................................................................15

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MEMORANDUM OF POINTS AND AUTHORITIES AND SUGGESTION OF LACK OF JURISDICTION INTRODUCTION The United States Department of Veterans Affairs (VA) operates one of the largest health care systems in the country. To support its mission, VA has a large inventory of real property that includes the land on which VA medical centers (VAMCs), operated by VAs Veterans Health Administration (VHA), are located. In 1996, Congress significantly expanded the ways in which VA could use real property controlled by VHA, by authorizing the Secretary, under 38 U.S.C. 8151-53, to, at his discretion, enter into sharing agreements that allow other entities to share or use VA land and space, if the Secretary determined that such agreements are in the best interests of the VA medical care program. Congress gave VA this sharing authority to strengthen the medical programs at its facilities, and improve the quality of care provided to Veterans, with revenue generated through such agreements credited to the sharing VA facilities medical accounts. 38 U.S.C. 8151, 8153(b). Plaintiffs, who describe themselves as Veterans with severe mental impairments and/or brain injuries, have sued under the Administrative Procedure Act (APA), 5 U.S.C. 706(2), seeking an order vacating existing agreements to share space on VAs West Los Angeles (WLA) medical center campus. The APA does not permit such challenges to proceed. Where, as here, Congress has committed an agency action to the agencys discretion, judicial review is not available. Therefore, Plaintiffs APA claim must fail. Even if the Court could review Plaintiffs claim, it should be denied because VAs decisions to enter into these sharing agreements were not arbitrary and capricious or contrary to law.

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FACTUAL AND PROCEDURAL BACKGROUND In the course of administering its WLA Campus to provide health-care services to Veterans, VA has entered into a variety of land-use agreements with other entities. Order Granting in part & Denying in part Defs. Mot. to Dismiss (Order MTD) 4, 8, Mar. 16, 2012 (ECF No. 70). One type of land-use agreement that VA uses in this regard is an Enhanced Sharing Agreement (ESA), authorized pursuant to 38 U.S.C. 8151-53. ESAs are agreements between VA and any health-care provider, or other entity or individual, for the purpose of secur[ing] health-care resources which otherwise might not be feasibly available, or to effectively utilize certain other health-care resources. Id. 8151(a)(1).1 The one claim remaining in this case, brought under the APA, alleges that VA of Greater Los Angeles (VA-GLA) has improperly entered into land deals using its ESA authority. See First Am. Compl. (FAC) 311-315, Aug. 12, 2011 (ECF No. 24). This Court has described the scope of Plaintiffs APA claim in ruling on earlier motions in this case. The Court has explained that Plaintiffs are challenging VAs decision to enter into specific land-use agreements pursuant to ESAs,2 Order MTD 17, and that Plaintiffs seek an injunction prohibiting VA With respect to land on other campuses, VA also enters into Enhanced Use Leases (EULs), pursuant to 38 U.S.C. 8161-69. VAs EULs are leases for underutilized and vacant real property that can be used more broadly for leasing any kind of facility. See Id. Since 2008, VA has been prohibited by Congress from entering into EULs on the WLA campus unless specifically authorized by law. See id. 8162(c); Section 224(a) of the Military Construction and Veterans Affairs and Relate Agencies Appropriations Act of 2008. To date, Congress has not specifically authorized VA to enter an EUL at the WLA campus. 2 Plaintiffs do not identify any ESAs in particular as allegedly unlawful or arbitrary and capricious. This should doom their claim even under the most liberal pleading standard, and is another reason why judgment should be entered for Defendants. Moreover, to the extent that Plaintiffs claim is that VAs sharing agreements should have been executed as EULs as opposed to ESAs, such a claim must fail on its face since VA was prohibited from entering into EULs for land or space on the West Los Angeles campus. See Order MTD 11.
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GLA from executing under 38 U.S.C. 8151-8153 (the statutes that authorize enhanced sharing agreements) any agreements that do not concern the sharing of health-care resources. Id. at 6 (citing FAC Req. for Relief).3 The Court apparently understands Plaintiffs to be trying to challenge VAs decisions to enter certain ESAs on the WLA campus.4 Plaintiffs pleadings to date suggest that their challenge is even narrower: Plaintiffs do not appear to have identified any basis for their challenge other than contending that the land at issue is not a health-care resource under 38 U.S.C. 8151-53 and that at least some of the ESAs do not benefit Veterans. ARGUMENT I. VAS ACTIONS ARE UNREVIEWABLE BECAUSE THEY ARE COMMITTED TO AGENCY DISCRETION A court conducting APA judicial review determines whether or not as a matter of law the evidence in the administrative record permitted the agency to make the decision it did. Occidental Engg Co. v. INS, 753 F.2d 766, 769 (9th Cir. 1985).5 [B]efore any review at all may be had [under the APA], though, a Plaintiffs do not specify which agreements they allege do not concern the sharing of health-care resources. FAC Req. for Relief; see generally FAC 31115. 4 See Order Granting In Part & Denying In Part Pls. Mot. To Supplement the Administrative R. (Order Supp. AR) Jan. 22, 2013 (ECF No. 108) (addressing scope of administrative record); and the Administrative Record (AR), as supplemented. Defs. Notice of Filing Administrative R., Oct. 22, 2012 (ECF No. 96); Defs. Notice of Filing Suppl. to Administrative R., Nov. 20, 2012 (ECF No. 98); Defs. Notice of Filing Supp. to Administrative R., Feb. 19, 2013 (ECF No. 112). In addition, Defendants are filing concurrently with their summary judgment motion additional pages of documents that VA recently determined should be included in the administrative record. See Defs. Notice of Filing Supp. to Administrative R.(filed herewith) (ECF No. 115). 5 Where an agency action is upheld in an APA challenge, summary judgment is appropriately entered for defendants. Sierra Club v. Mainella, 459 F. Supp. 2d 76, 90 (D.D.C. 2006); Pinnacle Armor v. United States, No. 1:07-cv-01655, LJO DLB, 2012 WL 5307666 (E.D. Cal. Oct. 26, 2012).
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party must first clear the hurdle of [5 U.S.C.] 701(a). Heckler v. Chaney, 470 U.S. 821, 828 (1985).6 In relevant part, that section of the APA precludes review over agency action [that] is committed to agency discretion by law. 5 U.S.C. 701(a)(2); Heckler, 470 U.S. at 828, 830, 843. APA claims can only proceed against the government, which otherwise enjoys sovereign immunity from suit, to the extent the APA waives the governments sovereign immunity. Therefore, when a challenged action falls within 701(a)(2)s exception to APA review for actions committed to an agencys discretion, the APAs waiver of sovereign immunity does not extend to that claim, and the court, therefore, lacks subject matter jurisdiction over the matter and must dismiss such a claim. See e.g., E.J. Friedman Co. v. United States, 6 F.3d 1355, 1359 (9th Cir. 1993).7 Also before any review may be had, Plaintiffs must establish that they have standing. Pritkin v. Dept of Energy, 254 F.3d 791, 796-97 (9th Cir. 2001). While this Court, in considering Defendants Motion to Dismiss, found that Plaintiffs had adequately pled standing, the burden for establishing standing is more rigorous at the summary judgment stage of a case than at the motion to dismiss stage. Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992). Moreover, the Courts holding seems based on its understanding that Plaintiffs APA claim challenged VA sharing space pursuant to ESAs, as opposed to EULs. Order on MTD n.5 (Plaintiffs injury is connected to the DVAs affirmative act to enter into land-use agreements pursuant to ESAs instead of EULs). In subsequent orders, though, the Court has seemed to understand the APA claim as a broader challenge to the lawfulness of WLA ESAs. See Order Granting in part & Denying in part Defs.Mot. for Recons. (Order on Recons.) 7, June 19, 2012 (ECF No. 87). Plaintiffs do not have standing to bring such a claim because they suffered no direct injury from the allegedly unlawful agreements, and, even if they had suffered such injury, no judicial declaration could redress it. Lujan, 504 at 560-61. The Court acknowledged as much when it noted that If Plaintiffs prevail on this claim and the existing land-use agreements are deemed unlawful, Plaintiffs certainly hope that this land will be used to construct permanent supporting housing for their benefit. But . . . Plaintiffs recognize that if the existing land use agreements are determined to be unlawful, the Government could choose to use the land for any lawful purpose, and the Government might not choose to use the land to create permanent supportive housing.) Order on Recons. 7. (emphasis added). Such an attenuated claim cannot establish Plaintiffs standing at this stage of the case. See Levine v. Vilsack, 587 F.3d 986, 993 (9th Cir. 2009) (even confiden[t] speculation rejected in standing analysis). 7 A federal court can always consider whether it has subject matter jurisdiction, see Fed. R. Civ. P. 12(h)(3), and the Ninth Circuit on multiple occasions has addressed the committed to agency discretion exception to the APA in the context of summary judgment rulings. See, e.g., Strickland v. Morton, 519 F.2d
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Although the exception from APA review applying to acts committed to agency discretion is a narrow one, it applies where, as here, statute[s are] drawn in such broad terms that in a given case there is no law to apply, Pac. NW. Generating Coop. v. Bonneville Power Admin., 596 F.3d 1065, 1075 n.7 (9th Cir. 2010) (citing Heckler, 470 U.S. at 830), thereby leaving the court with no meaningful standard against which to judge the agencys exercise of discretion. Pinnacle Armor Inc., v. United States, 648 F.3d 708, 719 (9th Cir. 2011) (citing Heckler, 470 U.S. at 830). In evaluating whether a statute is so drawn, courts look to the language of the statute itself, its overall structure, and whether it involves an area of executive action in which the courts have been hesitant to intrude. Webster v. Doe, 486 U.S. 592, 601 (1988); Helgeson v. Bureau of Indian Affairs, 153 F.3d 1000, 1003 (9th Cir. 1998).8 Under such an analysis, it is clear that VAs decisions to enter into the challenged ESAs were committed to VAs discretion, and therefore are not subject to judicial review.

467, 468 (9th Cir. 1975). At the time Defendants filed their dismissal motion, Plaintiffs claims were so indeterminate that their focus was not entirely clear. See Order MTD (clarifying, among other things, what final agency action Plaintiffs were alleging). Once the Court clarified Plaintiffs claims in its orders of March 16, 2012 (ECF No. 70), June 19, 2012 (ECF No. 87), and Jan. 22, 2013 (ECF No.108), the fact that Plaintiffs are challenging agency actions that are committed to the agencys discretion became more apparent. 8 Some courts evaluate whether an act is committed to agency discretion based on the language of the statute and whether the general purpose of the statute would be endangered by judicial review. Pinnacle Armor, Inc. v. United States, 648 F.3d 708, 719 (9th Cir. 2011); Harkonen v. United States Dept of Justice, No. C12-629 CW, 2012 WL 6019571 at *14 (N.D. Cal. Dec. 3, 2012). Under this framework, too, Plaintiffs claims are committed to agency discretion by law because judicial review is precluded where courts have neither standards nor expertise to effectuate such purpose. See Pinnacle, 648 F.3d at 720. Here, the sharing program is designed to strengthen VA medical programs, see 38 U.S.C. 8151, and review of ESA decisions by courts that have neither the standards nor expertise to strengthen such programs could instead endanger them. Id.
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38 U.S.C. 8153 vests complete discretion in the Secretary to enter or not enter into enhanced sharing agreements (ESAs). The statute provides, in relevant part, that to effectively utilize health-care resources the Secretary may make agreements for the sharing of health-care resources between VA and any health-care provider or other entity or individual when the Secretary determines it to be in the best interest of the prevailing standards of the Department medical care program. 38 U.S.C. 8153(a)(1) (emphasis added). A. The Language of 8153 Shows The Decisions to Enter ESAs Are Committed to VAs Discretion

Section 8153 contains at least four separate textual indicators that Congress intended the decision to enter into an ESA to be entrusted exclusively to the VA Secretary, and that the statutory language provides no law against which a court might assess the Secretarys decision to enter into an ESA: First, and perhaps most significantly, Section 8153 does not require the Secretary to enter into any sharing agreements. The language is precatory, rather than mandatory providing that the Secretary may enter into such agreements. May does not mean must or should. Instead, 8153 contains language that the Ninth Circuit has repeatedly found commits an agencys decision to the agencys discretion, and makes it unreviewable. See E.J. Friedman Co. v. United States, 6 F.3d 1355, 1359 (9th Cir. 1993) (no APA review available where statute provides that IRS may, in its discretion, issue a certificate of discharge);9 Rank v. Nimmo, 677 F.2d 692, 699 (9th Cir. 1982) (agency decision was unreviewable because the statutory use of the word may helped make clear that Congress intended to vest the widest discretion possible in the Administrator).

Conversely, courts have relied on the presence of mandatory language to find jurisdiction. See, e.g., Beno v. Shalala, 30 F.3d 1057, 1066 (9th Cir. 1994).
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Second, Section 8153 explicitly conditions entering into an ESA on the Secretary[s] determin[ation] of what is in the VA medical programs best interest. 38 U.S.C. 8153(a)(1). Thus, the touchstone for whether an ESA is appropriate is only whether the Secretary determines it to be the programs best interest, not whether it is in the agencys best interest in some objective way. See Webster, 486 U.S. at 600 (agencys termination decision not reviewable because the statute provided for termination when the director deemed it necessary or advisable in the interests of the United States, not when dismissal is necessary or advisable to those interests); Ellison v. Connor, 153 F.3d 247, 254 (5th Cir. 1998) (court lacked jurisdiction when law authorized Secretary to act whenever he shall deem it to be advantageous to the Government) (internal citation omitted); Forsyth Cnty. v. Army Corps of Engrs, 633 F.3d 1032, 1041 (11th Cir. 2011) (no review when statute provides that the Secretary of the Army is authorized to act for such periods, and upon such terms and for such purposes as he may deem reasonable in the public interest) (internal citation omitted). Third, 8153 allows but does not require VA to enter ESAs that, in the judgment of the Secretary, are in the best interest of the prevailing standards of the Department medical care program. 38 U.S.C. 8153(a)(1) (emphasis added). By providing for an assessment of what is in the programs best interest, rather than delineating a list of provisions or factors that the ESAs should meet, the statute provides still greater discretion to the Secretary, and no judicially manageable benchmarks to govern judicial review. See, e.g. Webster, 486 U.S. at 600. Fourth, the statute provides that the Secretary may enter into ESAs with any health-care provider or other entity or individual. 38 U.S.C. 8153(a)(1) (emphasis added). It could have restricted who VAs sharing partners could be; in
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fact, a prior version of the statute provided just such a restriction. See H.R. Rep. No. 104-690 at 11 (1996). In enacting the current version of 8153(a)(1), however, Congress specifically chose to ease earlier restrictions on agency discretion to enter into sharing agreements. See Pub. L. 104-262, Title III(A) (1996). Congress use of the words any and other removed any limitation on who VAs sharing partners could be, reflecting Congress intent to give the Secretary maximum discretion to choose how, and with whom, the agency should enter into sharing agreements. See H.R. Rep. No. 104-690 at 11.10 B. The Statutory Framework and Legislative History Show VA Decisions to Enter ESAs Are Committed to VAs Discretion

The statutory structure confirms this Congressional intent. See Helgeson, 153 F.3d at 1003 (consider overall statutory structure in determining whether act has been committed to agency discretion). Congress did not include any guidelines for judicial review and did not require the Secretary to promulgate any regulations, which might have constituted law that could be applied.11 Also, Section 8153 is
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Another indication that Congress intended to commit to the VAs total discretion the decision to enter ESAs is Congress forbearing from setting standards by which a court could review these decisions and declining to provide for judicial review of these agreements. Instead, the statute provides an alternate oversight mechanism: annual VA reports to Congress about its sharing agreements. See 8153(g); Rapides Regl Med.Ctr. v. Secy, Dept of Veterans Affairs, 974 F.2d 565, 575 (5th Cir. 1992) (Congress retained for itself the measuring stick . . . by which to evaluate the success of the sharing program now recodified at 8153: annual reports from the VA tracking activities under the program.) (Internal citation omitted). Recognizing that Congress intended to maintain oversight responsibilities for itself, and to foreclose court oversight, it would thwart the Congressional scheme were the Court to find it has jurisdiction to review VA decisions to enter sharing agreements pursuant to this statute. 11 To the extent Plaintiffs try to rely on the statutes introductory language about sharing health-care resources, the Court is respectfully referred to the discussion below about how the resources at issue in the challenged ESAs fall within VAs permissible interpretation of the statutes broad terms. See infra II.A.2. Moreover, introductory language about the statutes purposes can hardly be said to be very confining. See, e.g., Strickland, 519 F.2d at 469; see also Sierra Club v. USFWS, No. 11-993, 2013 WL 1111285 (D.D.C. Mar. 19, 2013) (finding Services determination was a decision committed to the Services discretion by law and thus
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located in Subchapter IV of the U.S. Codes chapter 81. This subchapter is titled Sharing of Medical Facilities, Equipment and Information (emphasis added). Congress did not provide a definition of medical facilities in Subchapter IV. It is therefore instructive to look at the definition of medical facility that appears in another subchapter of chapter 81. A medical facility is defined in subchapter I as any facility or part thereof which is, or will be, under the jurisdiction of the Secretary for the provision of health-care services (including hospital, nursing home, or domiciliary care or medical services), including any necessary building and auxiliary structure, garage, parking facility, mechanical equipment, trackage facilities leading thereto, abutting sidewalks, accommodations for attending personnel, and recreation facilities associated therewith. 38 U.S.C. 8101(3). Congress broad definition of the types of facilities that fall within this category indicates that VA has broad discretion to choose what resources are appropriate subjects of ESAs.12 Legislative history can also shed light on whether an action is committed to an agencys discretion. See, e.g., Strickland v. Morton, 519 F.2d 467, 469 (9th Cir. 1975). The legislative history of 8153 makes clear that Congress intended this statute to expand the scope of ESAs into which the Secretary could enter. Prior to 8153s enactment in 1996, VA was authorized to enter ESAs only with certain specified health-care entities for the mutual use or exchange of use of specialized medical resources, a narrowly defined term. H.R. Rep. No. 104-690 at 11 (1996). unreviewable because statutes clear purpose and goal does not provide the Court with meaningful standards). 12 Nothing in the text of 8151-8153 limits the subjects of ESAs to medical facilities, as defined in 8101(3). As described below, VA has exercised its broad discretion to interpret the phrase health-care support or administrative resource, contained in the health-care resource definition at 38 U.S.C. 8152(1) to include VHA space and land. See infra II.A.2. VHA space and land encompasses a range of real property assets, including medical facilities.
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Recognizing that these restrictions unduly constrained the Secretarys discretion to determine what types of agreements might be in the agencys best interests, Congress enacted the present version of 8153 to ease these various restrictions and give the Secretary far greater flexibility as to when a VA facility may enter into such a contract. See id. Congress contemplated that VA would broadly construe this new authority. Id.13 C. ESA Decisions Are Typical of Actions Committed to Agency Discretion

Courts have found that where an agency is far better equipped than the courts to deal with the many variables involved in the proper ordering of its priorities, an agencys action is committed to its discretion. See, e.g., Lincoln v. Vigil, 508 U.S. 182, 193 (1993) (citing Heckler, 470 U.S. at 831-32). Decisions to enter ESAs, which involve assessing the agencys objectives and available resources, involve just such determinations. See S. Rep. No. 104-372 at 45 (1996) (statement of Kenneth W. Kizer, Under Secretary for Health, Department of Veterans Affairs) (allowing VA increased flexibility to share resources with partners in private and public sectors will best allow VA to allocate its resources to serve veterans); H.R. Rep. No. 104-280 at 892 (1995) ([t]he amendments [to 8153], developed with an eye to both the difficult budget environment and the dynamic marketplace within which the VA health-care facilities are operating, The post-enactment history of 8153 also demonstrates that Congress intended for ESA decisions to be committed to VAs discretion. Congress has been informed in numerous ways about the broad discretion VA understands it has with respect to entering ESAs. See infra II.A.2. Even while Congress has received testimony about VA believing it has such broad discretion, and has amended the Enhanced Sharing Authority statute a number of times, see infra n.32, Congress has not narrowed the definition of health-care resources, restricted the purposes for which a health-care resource could be used pursuant to a sharing agreement, limited who VAs sharing partners could be or included mandatory standards or processes by which VA must determine whether entering a proposed sharing agreement is in the best interest of the VA medical program. It is clear, therefore, that Congress did not intend to fetter VAs discretion to enter into ESAs.
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reflect a belief that these facilities need far greater flexibility than existing law affords them to work out contractual arrangements with other providers, institutes and entities to share health-care resources). Decisions like those at issue here, regarding how federal resources like land will be used, have been deemed classic examples of decisions traditionally committed to agency discretion. See, e.g., Strickland, 519 F.2d at 471, n.6 (discretionary land classification decisions are typical of the type of cases raising non-reviewable category issues); Drakes Bay Oyster Co. v. Salazar, No. 12-cv06134-YGR, 2013 WL 451860, at *16 (N.D. Cal. Feb. 4, 2013) ([l]ike other zoning and land use questions, this issue will be resolved by policymakers charged with weighing the conflicting views and priorities of society as part of the decision making process).14 Likewise, VA is best placed to determine the optimal uses for its space, land, and property, because it is involved on a daily basis with the administration of such resources. For this reason, the one court to have previously addressed the discretionary nature of 8153 concluded that this provision yields great discretion to the Secretary and shields the Secretarys action from judicial review. Gibbons v. Fronton, 533 F. Supp. 2d 449, 456 (S.D.N.Y. 2008) (dismissing plaintiffs Federal Tort Claims Act claims because VAs decision to enter a contract [pursuant to 8153] falls within FTCAs discretionary function exception).15 Similarly, agency contracting decisions, like those at issue here, have been found to be committed to agencies discretion, and therefore unreviewable. See, e.g., Topgallant Grp., Inc. v. United States, 704 F. Supp. 265 (D.D.C. 1998) (Military Sealift Commands lifting of a stay suspending performance by contractor is unreviewable because committed to agency discretion by law where statute authorized agency to make determination based upon best interest of the United States). 15 By challenging VAs decisions to enter into ESAs with specific sharing partners, Plaintiffs are essentially asking the court to substitute its judgment for the agencys. This is precisely what is not permitted under the APA. See, e.g., Johnston Oyster Co. v. Malcom Baldridge, 704 F.2d 1060 (9th Cir. 1983); Strickland, 519 F.2d at 472; City & County of San Francisco v. United States, 443
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II.

EVEN IF VAS DECISIONS ARE REVIEWABLE, THEY DO NOT VIOLATE THE APA Even if VAs decisions to enter into each of the challenged ESAs are

reviewable, summary judgment should be granted for Defendants because these decisions were not arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law, in violation of 5 U.S.C. 706(2)(A). Review under this standard is highly deferential, and an agency decision must be upheld provided the agency does not rel[y] on factors which Congress has not intended it to consider, entirely fail[] to consider an important aspect of the problem, [or] offer[] an explanation for its decision that [either] runs counter to the evidence before the agency or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise. Motor Vehicle Mfrs. Assn v. State Farm Mut. Auto Ins. Co., 463 U.S. 29, 43 (1983). Under this narrow standard of review, a court may not substitute its judgment for that of the agency charged with administering the program at issue. Marsh. v. Or. Natural Res. Council, 490 U.S. 360, 378 (1989). In order to prevail on this claim, Plaintiffs must meet a heavy burden, see Managed Pharmacy Care v. Sebelius, 705 F.3d 934, 943 (9th Cir. 2012), which cannot be met here. Even when an agency explains its decisions with less than ideal clarity, a reviewing court will not upset the decision on that account if the agencys path may reasonably be discerned. Alaska Dept of Envtl. Conservation v. EPA, 540 U.S. 461, 496 (2004)(citations omitted). Because agency actions are presumed to be valid, agency decisions must be affirmed if a reasonable basis exists in the administrative record for the decision, regardless of how explicitly the agency identified that reasonable basis. Nw. Ecosystem Alliance F. Supp. 1116, 1123 (N.D. Cal. 1977)) (the cause of action alleges no more than that the award . . . was not in the public interest. This squarely presents the issue of whether the Secretarys judgment was or was not correct).
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v. U.S. Fish & Wildlife Serv., 475 F.3d 1136, 1147 (9th Cir. 2007). Where there is conflicting evidence in the record before the agency, the agencys determination is accorded deference. Natl Parks & Conservation Assn v. U.S. Dept of Transp., 222 F.3d 677, 682 (9th Cir. 2000). Finally, an agencys construction of a statute it is entrusted to administer must prevail if it is a reasonable construction of the statute, whether or not it is the only possible interpretation or even the one a court might think best. Holder v. Martinez Gutierrez, 132 S.Ct. 2011, 2017 (2012). A. VA Acted In Accordance With Law In Entering Into Space Sharing Agreements at its WLA Campus

Although, as explained above, Congress defined health-care resource in broad terms, the language of the statute itself reflects Congress view that agreements to share space are agreements to share health-care resources. Section 8152(1) provides that [t]he term health-care resource includes hospital care and medical services, . . . any other health-care service, and any health-care support or administrative resource. 38 U.S.C. 8152(1) (emphasis added). Another provision explicitly refers to space as a health-care resource. See 38 U.S.C. 8153(a)(3) (If the health-care resource required is a commercial service, the use of medical equipment or space, or research) (emphasis added).16 Thus, to the extent that Plaintiffs assertion that the challenged agreements do not concern the sharing of health-care resources, FAC at 91 (Request for Relief, E) depends upon a contention that no land or building on the grounds of VAs WLA medical center is a health-care resource, the claim is flatly contradicted by the statute itself.
16

While Section 8153(a)(3) applies specifically to VAs acquisition of health-care resources, rather than VAs selling (or leasing) of health-care resources, reading the statute as a whole shows that because space is encompassed within healthcare resource, VA can permissibly sell, or buy, the use of space pursuant to Section 8153.
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Any other basis for Plaintiffs APA claim calls into question either VAs interpretation of the statute which, if reviewable at all, must be afforded great deference or VAs managerial decisions to enter the specific ESAs at issue. Either way, VAs statutory interpretations, policy choices, and specific managerial decisions must be upheld. 1. VAs Reading of Section 8153 Must Be Accorded Deference. Even if an agency is not afforded the widest discretion possible, making its actions immune from judicial review, the Court must nevertheless defer to the agencys [broad] discretion where a statute provides an open [definition] of the bases on which an agency decision may be made. See Rank, 677 F.2d at 699-700. The broad and ambiguous terms used in 8151-53 confer particularly great discretion on the agency to decide what criteria it will use in determining whether and how to exercise its statutory authority. See id. In determining whether the challenged VA actions are contrary to law within the meaning of 5 U.S.C. 706(2)(B), because the statute is silent or ambiguous with respect to relevant matters, the question for the court is whether the agencys [interpretation] is based on a permissible construction of the statute. Chevron U.S.A., Inc. v. Natl Res. Def. Council, 467 U.S. 837, 842-44 (1984).17 In this inquiry, a court may not substitute its own construction of [the] statutory provision for a reasonable interpretation made by [the] agency. Id. at 844. Instead, the court should only determine whether the agencys interpretation of the statute is rational and consistent with the statute. NLRB v. United Food & Commercial Workers Union Local 23, 484 U.S 112, 123 (1987).

See also Arent v. Shalala ,70 F.3d 610, 616 n.6 (D.C. Cir. 1995) (Noting considerable overlap between Chevron analysis and State Farms arbitrary, capricious inquiry as to whether, under 706(2)(A), the challenged agency action must be set aside as not in accordance with law).
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Because 8151-8153 are silent as to critical matters such as how the Secretary18 is to determine whether entering a particular ESA is in the best interest of the VA medical program,19 and leave some ambiguity as to what constitutes a health-care resource,20 this deferential standard applies to VAs interpretation of ambiguous terms and gaps in the statute, which is set forth in VHAs policy directives and handbooks, and reflected in VAs decisions to enter individual ESAs. See generally AR 16-88 (policy directives and handbooks); AR 191-1685 (individual ESA decisions). The circumstances here support the application of Chevron deference to both VAs overall interpretation of 38 USC 8151-53 and the specific decisions to enter ESAs that Plaintiffs challenge. See Barnhart v. Walton, 535 U.S. 212, 222 (2002) (degree of deference depends upon the interstitial nature of the legal question, the related expertise of the Agency, the importance of the question to administration of the statute, the complexity of [the] administration, and the careful consideration the Agency has given the question over a long period of time). Indeed, an agencys implicit interpretation of a statute may be expressed through its explicit determination[s] in making specific decisions. See Managed Pharmacy Care v. Sebelius, 705 F.3d 934, 946 (9th Cir. 2012). Decision-making authority is delegated from the Secretary to the Under Secretary for Health in 38 CFR 17.142 and from the Under Secretary to medical center directors in VHA Handbooks 1660.01, AR 40, 44-45, and 1820.01, AR 59, 64-65. The Deputy Assistant Secretary for Acquisition and Materiel Management generally appoints VA selling officials. AR 55. 19 The undefined term best interest has been found to be a broad and ambiguous term capable of multiple permissible interpretations. See, e.g., Pharm. Research & Mfrs. Of Am. v. Thompson, 259 F. Supp. 2d 39, 72 (D.D.C. 2003); affd, 362 F.3d 817 (D.C. Cir. 2004). Moreover, an agencys consideration of multiple factors contributing to the best interest of the agency program and its beneficiaries in the aggregate has been upheld as reasonable even when the agency decision might not serve the best interest of some program beneficiaries. See id. 20 For example, Section 8152 does not define health-care support or administrative resource. See 38 U.S.C. 8152(1).
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Chevron deference is particularly appropriate here because, in managing space available at its WLA medical center, VA must balance competing interests based on the health-care and related needs of Veterans, as well as a number of other statutes and considerations.22 Agency decisions about whether to enter into agreements are generally afforded a significant degree of deference.23 At a minimum, the level of deference generally given to an agencys unpublished orders is appropriate here. Under this standard, internal agency guidance that lacks the force of law is given deference on a sliding scale, depending upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control. United States v. Mead, 533 U.S. 218, 228 (2001) (quoting Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944)); accord Marmolejo-Campos v. Holder, 558 F.3d 903, 909 (9th Cir. 2009). Given the reasonableness of VAs approach to implementing the sharing authority statute, the agencys reading of the statute should be credited.

See, e.g., WLA Medical Center, Veterans Programs Enhancement Act of 1998 (VPEA) Master Plan, AR 151-189, at AR 155 (VA required to pursue goal of creating a therapeutic and recovery oriented environment on the campus for Veterans to heal); AR161 (development activities on WLA Campus will strive to benefit the Veteran population in harmony with the surrounding community, and comply with all applicable laws, codes, ordinances, and regulations, including but not limited to pertinent environmental and historic preservation laws); and AR 174 (use of WLA campus to be based on physical and operational objectives such as providing recreational facilities for Veterans and partnering with the community to make the campus esthetically pleasing as well as mission objectives such as developing physical environment that supports the delivery of health care, education, and research). 23 See, e.g., Am. Fedn of Govt Empls. v. Brown, 680 F.2d 722 (11th Cir. 1982) (deference to agency decision depends on breadth of discretion given to agency; extent to which challenged action is product of political, economic, or managerial choices; and extent to which challenged action is based on specialized knowledge or expertise.).
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2.

VAs Interpretation Of Its Authority Under 8153 Is Permissible.

VA has permissibly interpreted 8153s inclusion of space as a health care resource to mean that [e]nhanced sharing agreements for the use of VA space (including parking, outdoor recreational facilities, and vacant land) are authorized under 38 U.S.C. Section 8153. AR 26. This is consistent with VAs interpretation of health care support services and administrative resources as used in Section 8152. VA has stated that [h]ealth care support [services] serve medically-related purposes (e.g., biomedical equipment repair, patient transport), AR 43, while [a]dministrative resources include services not unique to the provision of medical care, but deemed necessary to support the operation of a medical center (e.g., transcription services, ground maintenance). Id. It stands to reason that space, including land and buildings that form part of the WLA medical center, can reasonably be understood to support the operation of a medical center, even though, like transcription services or grounds maintenance, it might not be unique to the provision of medical care. AR 43. Indeed, space and land under VHA control are necessary to enable VA to provide medical care. To the extent that Plaintiffs challenge VAs entry into ESAs on the ground that these resources are not unique to the provision of medical care, they are challenging a reasonable and longstanding statutory interpretation by the agency Congress entrusted with broad discretion to decide whether and when to enter ESAS. Id. VAs interpretation of best interest is, generally, that an ESA should be executed only when the agency determines, first, that the contract will not result in the diminution of existing levels of services to [V]eterans, and, second that the agreement is either necessary to maintain an acceptable level and quality of services to [V]eterans or will result in the improvement of services to Veterans.
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AR 45. VA understands that determining the best interest of the VA medical program includes consideration of the contemplated use of VA space. Id. Among other factors, VA considers the potential impact of a proposed agreement on patient privacy, VA computer systems, telecommunications and data, parking, and fire health, and safety and security and law enforcement issues in sharing the use of VA space. AR 26. Thus, in order to exercise the Secretarys authority pursuant to 8153, VA has interpreted both health care resource and best interest in reasonable, practical ways which enable the agency to exercise its sharing authority appropriately. Further, as discussed below, VAs decisions to enter specific ESAs demonstrate the agencys implicit interpretation that agreements to sell space may benefit Veterans either by reducing VAs costs to maintain under-utilized resources or by providing revenue that VA uses to support Veteran health care programs at WLA even where the ESAs permit the space to be used to benefit nonVeterans. If there were any doubt that VAs interpretation of 8153 is permissible, such doubt is eliminated by Congress awareness and implicit acceptance of these interpretations. It is well established that an agencys interpretation of a statute may be confirmed or ratified by subsequent congressional failure to change that interpretation, State Farm, 463 U.S. at 45, particularly where the inference of congressional approval is supported by more than mere congressional inaction. Haig v. Agee, 453 U.S. 290, 300 (1981) (internal citation omitted). Here, the ample evidence of . . . congressional familiarity with the administrative interpretation at issue, Cape Cod Hosp. v. Sebelius, 630 F.3d 203, 214 (D.C. Cir. 2011) (citation omitted), supports the conclusion that Congress failure to change

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the statute to preclude VAs interpretations establishes Congress acceptance of VAs interpretations. VAs annual ESA reports have informed Congress that agreements for the sharing of space, facilities, and administration, comprise a significant portion of VA ESAs. See, e.g. AR 116.012, 116.023, 116.044, 116.058, 116.072, 137. Additionally, VA has made clear that the benefit provided to the VA medical program by an ESA is often revenue, stating that [t]he sharing authority is . . . a key mechanism . . . in generating revenues, AR 98, and that the 1996 expansion26 of the definition of health care resources enables VA to offset its costs and establish revenue streams which are retained at the VAMCs providing the services where they can, in turn, be used to enhance VAs services to its veteran beneficiaries. AR 100-101.27 Testimony before its oversight committees provided Congress with further information about VAs use of ESAs. For example, the GAOs Director of Physical Infrastructure testified that VA may enter into sharing agreements to provide the use of VHA space (including parking, recreational facilities, and vacant land 28 and explained that VA uses sharing agreements to generate financial benefits.29 In addition, Congress has received testimony about how VA exercises VA also noted that These changes greatly enhance VA flexibility and opportunity to purchase and to sell health care resources. And significantly, as the range of sharing opportunities has broadened, the cost effective delivery of highquality medical care to VA patients has increased. AR 96. 27 Some annual reports also include charts showing the revenue that VA has earned from selling space and other resources within each fiscal year. See, e.g., AR 115, 127. VA has received millions of dollars in proceeds annually from sharing VHA space and land nationwide, including through ESAs at the WLA campus. See AR 94-131. 28 Assessing Capital Asset Realignment for Enhanced Services and the Future of the U.S. Department of Veterans Affairs Health Infrastructure: Hearing Before the H. Comm. on Veterans Affairs, 111th Cong. 79 (2009) (2009 Hearing) (statement of Mark L. Goldstein, Director, Physical Infrastructure, U.S. Government Accountability Office). 29 Id. at 78.
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its discretion under 8153 to enter into certain types of agreements, including agreements allowing VA facilities to be used to film television and movie productions.31 Members of Congress have even received notification before VA exercised its discretion to enter into specific ESAs.32 Congress intended to review VAs annual reports with an eye toward any changes to the sharing statute that might be deemed necessary. See 38 U.S.C. 8153(g). Had Congress wished to curtail VAs discretion, it could have amended the statute to do so, especially since it has amended 8153 on a number of occasions.33 However, since Congress did not amend the statute either to narrow the definition of health-care resource, restrict the purposes for which a healthcare resource could be used pursuant to an ESA, limit who VAs sharing partners could be, or prescribe how VA must determine the best interest of the VA medical program, Congress has implicitly accepted VAs interpretations. Cape Cod Hosp., 630 F.3d at 214. While Congress may not have enshrined VAs interpretations as the only ones permissible under the statute, its failure to overrule an agencys construction of legislation is at least some evidence of the reasonableness of that construction, particularly where the administrative construction has been brought to Congress attention." United States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 137 (1985).34 Accordingly, Congress has implicitly accepted VAs interpretations of 8153. See id . See, e.g., AR 228-230 (Letter from Richard Sandler to Rep. Henry Waxman regarding proposed Brentwood School Sharing Agreement (June 16, 1999)). 33 Veterans Benefits Act of 1997, Pub. L. No. 105-114, 111 Stat. 2277; Veterans Benefits and Healthcare Improvement Act of 2000, Pub. L. No. 106-419, 114 Stat. 1822; Veterans Health Care, Capital Asset, and Business Improvement Act of 2003, Pub. L. No. 108-170, 117 Stat. 2042; Pub. L. No. 111-350, 124 Stat. 3677 (2011). 34 Courts have rejected claims that, by mere inaction, Congress has acquiesced to a particular agency interpretation. See, e.g., Morales-Izquierdo v. Gonzales, 486 F.3d 484, 493 (9th Cir. 2007) (citing Solid Waste Agency of N. Cook Cnty. v. Army
32 31

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B.

VAs Decisions To Enter ESAs Are Supported by the Administrative Record, Which Shows That Decisions Were Rationally Based On Relevant Factors

Even if the Court determines that it has jurisdiction, applying the requisite level of deference, summary judgment should be granted to Defendants. A review of the Administrative Record demonstrates the appropriateness of VAs ESA decisions. Plaintiffs have not met and cannot meet the heavy burden they would have to bear to overcome the presumption of regularity and have this Court invalidate those decisions. See Managed Pharm., 705 F.3d 943; Akiak Native Cmty v. U.S. Postal Serv., 213 F.3d 1140, 1146 (9th Cir. 2000). First, the Administrative Record is replete with examples of VAs designated decision makers certifying that they have made specific determinations that, under a particular ESA, (1) Veterans will receive priority for services; (2) the agreement is necessary either to maintain an acceptable level and quality of services or to improve such services; and (3) that VAs decision has been made in the interest of the government and provides a benefit to the community. See, e.g., AR 212 (Brentwood School ESA); AR 237 (Rancho Santa

Corps, 531 U.S. 159, 169 (2001); Rapanos v. United States, 547 U.S. 715, 749 (2006)). However, those cases are distinguishable. In Morales-Izqueirdo, for example, the plaintiff argued that because Congress had acquiesced to an agencys previous regulation, a more recent one reflecting a different interpretation was invalid. Id. at 493. The Ninth Circuit rejected that argument for failure to point[] to anything in the legislative history that discloses congressional acquiescence in the agency's past practice, and explained that [a] finding of congressional acquiescence must be reserved for those rare instances where it is very clear that Congress has considered and approved of an agencys past practice lest the agency be improperly deprived of the very flexibility Congress intended to delegate. 486 F.3d at 493. Here, in contrast, VAs annual reports to Congressional oversight committees provide clear evidence that Congress considered and accepted VAs administrative practices. Moreover, VA is not arguing that Congressional acquiescence restricts VA to a particular statutory interpretation, which would deprive the agency of flexibility, but only that Congress has implicitly accepted VAs current, longstanding interpretation as a permissible one.
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Ana Botanical Garden ESA); AR 337 (Sodexo Marriott Laundry Services ESA); AR 1036 (Westside Services ESA). Second, the record contains ample evidence that VA weighed relevant factors and reached a determination that on balance the ESAs were in the best interest of the . . . [VA] medical program. 38 U.S.C. 8153(a)(1). With respect to some ESAs, VAs best interest determination was based in part on the anticipated creation of Compensated Work Therapy (CWT) jobs35 or other employment opportunities for Veterans. See, e.g., AR 296 (Rancho Santa Ana Botanical Garden); AR 616 (Twentieth Century Fox ESA); AR 674 (U.S. Vets Initiative; AR 1058 (Farmers Market ESA); AR 1112 (Richmark Entertainment ESA)). With respect to others, the agencys best interest determination rested largely on the provision of support services and temporary or transitional housing to homeless Veterans. See, e.g., AR 449-450; AR 525-526 (Salvation Army ESAs for Buildings 212 and 207). In making some ESA decisions, VAs best interest determination was based in part upon availability of recreational opportunities for Veterans. See, e.g., AR 194 (Brentwood School ESA); AR 384 (UCLA baseball stadium ESA); AR 827 (Veterans Park Conservancy ESA); AR 880 (Westside Breakers Soccer Club); accord AR 174 ([p]roved[ing] recreational facilities for Veterans living on campus is one of the [p]hysical [o]bjectives guiding use of WLA Campus). Finally, in some instances, VAs best interest determination was based either partly or entirely on anticipated revenue that would benefit Veterans and/or a reduction in the cost to VA of maintaining the underlying real property. See, e.g., AR 204, 276 (Brentwood School ESA); AR 334 (Sodexo

CWT jobs provide eligible Veterans a chance to learn and improve work skills and habits in order to transition to more independent living. See 38 U.S.C. 1718, 2013(a)(3).
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Marriott Laundry ESA); AR 412 (Jackie Robinson Baseball Stadium); AR 616 (Twentieth Century Fox ESA). Thus, applying the highly deferential standard under which agency action is presumed to be justified, see Natl Wildlife Fedn v. Burford, 871 F.2d 849, 856 (9th Cir. 1989), VAs challenged decisions should be upheld. Plaintiffs claim that VA improperly used its sharing authority to enter ESAs that were not for sharing of health-care resource, is entirely without support in the administrative record. The challenged ESAs must be upheld because they are based on VAs consideration of the relevant factors and there is no clear error of judgment.

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CONCLUSION Defendants Motion for Summary Judgment should be granted. Respectfully submitted, Dated: April 10, 2013 STUART F. DELERY Acting Assistant Attorney General ANDRE BIROTTE JR. United States Attorney LEON W. WEIDMAN Chief, Civil Division ALARICE M. MEDRANO Assistant United States Attorney JUDRY L. SUBAR Assistant Branch Director By: /s/ Elisabeth Layton ELISABETH LAYTON Senior Counsel KAREN S. BLOOM Trial Attorney U.S. Department of Justice Civil Division Federal Programs Branch 20 Massachusetts Ave., N.W. Washington, DC 20001 T: (202) 514-3183;F: (202) 616-8470 Email: Elisabeth.Layton@usdoj.gov Attorneys for Defendants

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