article: On July 10, 2014, five U.S. citizens who had their information entered into counterterrorism databases and were subjected to law enforcement scrutiny and interrogation, filed this lawsuit against the Department of Justice ("DOJ") and the Program Manager of the Information Sharing Environment ("PM-ISE"). Plaintiffs challenged the legality of a domestic surveillance program, and sought declaratory and injunctive relief. They brought suit in the U.S. District Court for the Northern District of California, under the Administrative Procedure Act ("APA") and the Declaratory Judgment Act. Plaintiffs were represented by the American Civil Liberties Union ("ACLU"), the ACLU of California, and Asian Americans Advancing Justice-Asian Law Caucus. The case was assigned to Judge Richard Seeborg. Through the National Suspicious Activity Reporting Initiatives ("NSI"), the federal government encourages state and local law enforcement agencies and private actors to collect and report information that has a potential nexus to terrorism through Special Activity Reports. Plaintiffs were reported as having engaged in "suspicious activities" under DOJ and PM-ISE standards when engaged in actions such as taking pictures, buying computers, and standing in a train station. As a consequence of being reported through SARs, plaintiffs were subject to law enforcement scrutiny and interrogation. Plaintiffs claimed that the DOJ and PM-ISE Standards for SARs are invalid because they violate federal statutory requirements that agencies observe certain procedures and not act in an arbitrary or capricious manner. Specifically, plaintiffs contended that defendants' standards conflict with a DOJ regulation (28 C.F.R. § 23) (hereinafter Part 23) that prohibits the collection, maintenance, and dissemination of criminal intelligence information unless there is reasonable suspicion of criminal activity, and that defendants' standards were not promulgated in accordance with the notice and comment requirements of the APA. Plaintiffs claimed that the PM-ISE adopted a “Functional Standard” that utilises overly broad criteria to define the types of activities deemed as having a potential nexus to terrorism. The government moved to dismiss the case on October 16, 2014. First, defendants claimed that plaintiffs lacked standing because 1) they had not alleged a nexus between their injuries and the guidance provided by defendants, and 2) their allegations of future law enforcement scrutiny were too speculative to satisfy the requirement of imminent future harm to warrant prospective relief. Second, defendants claimed that plaintiffs failed to plead an action that could proceed under the APA because alternative remedies were available to plaintiffs and the guidance provided by defendants in connection with the NSI did not create binding legal obligations remediable under the APA. Finally, defendants argued that plaintiffs' claims were improperly joined and should be severed. Plaintiffs filed a response to the motion to dismiss on November 20, 2014. On February 20, 2015, Judge Richard Seeborg denied a motion to dismiss, holding that the defendants’ contentions as to causality and redressability both fail, as the plaintiffs are claiming injury from what happens after the encounters law enforcement or private security officers. Consequently, the plaintiffs are not challenging the conduct of law enforcement or private security officers during the alleged encounters, but rather, they are seeking to remedy harms that arise directly from the existence of the defendants’ Standards. The court also accepted that the plaintiffs had standing to bring the case, and that the APA claims are not subject to dismissal on grounds that plaintiffs have adequate remedies elsewhere. On September 3, 2015, the plaintiffs filed a First Amended Complaint, which claimed that the defendants violated the APA in two ways. First, plaintiffs argue the Functional Standard was adopted without complying with the APA’s requirement that the public be provided a notice and comment period prior to adoption of “legislative rules.” While defendants acknowledge no such notice and comment procedure was utilised, they argued that the Functional Standard is not a “legislative rule” subject to the requirement, or that even if it were, the violation was harmless because the Functional Standard was adopted through a collaborative process that included public input. Second, plaintiffs claimed that adoption of the Functional Standard was “arbitrary and capricious” because of the alleged conflict with Part 23. Defendants argued there is no conflict that renders adoption of the Functional Standard improper. On September 8, 2015, the case was referred to Magistrate Kandis A. Westmore for discovery. On December 18, 2015, the Magistrate held that defendants are to revisit their compilation of the administrative record to ensure that it includes all documents and materials considered by the agency in deciding (1) to adopt a standard that is broader than Part 23 and authorizes the collection, maintenance, and dissemination of information even in the absence of reasonable suspicion of criminal activity, in conflict with 28 CFR Part 23 and (2) to promulgate such a standard without public notice and comment. On March 27, 2017, Judge Richard Seeborg issued an Order on Cross Motions for Summary Judgment. In this Order, the court noted that the crux of the dispute lay in the distinction between the “reasonably indicative” standard, and the “reasonable suspicion” standard. This distinction was raised when the Plaintiffs argued that the Functional Standard conflicted with a duly-promulgated DOJ regulation, Part 23, which they asserted was adopted to protect constitutional and privacy rights by prohibiting the collection of “criminal intelligence” unless supported by “reasonable suspicion.” The Functional Standard, in contrast, called for sharing of SARs whenever they reflect “observed behaviour” that was “reasonably indicative of pre-operational planning associated with terrorism or other criminal activity.” Both sides had agreed that “reasonably indicative” is a lesser standard which calls for dissemination of SARs even in the absence of “reasonable suspicion.” The question before the court was therefore whether defendants failed to comply with the APA in adopting the “reasonably indicative” standard. The court held that the defendants were able to show that the adoption of the Functional Standard did not violate the APA. First, the court held that the Functional Standard was fundamentally a policy guidance statement, and that it was not subject to a notice-and-comment requirement. Second, the court accepted the defendants’ argument that the Functional Standard was developed to address data collection and dissemination issues not already within the scope of Part 23, and while they could have adopted the same standard, the record revealed no “clear error of judgment” or “failure to consider an important aspect of the problem” or such a counter-factual or implausible explanation as to permit the court to substitute its judgment of what a better rule might be. In a footnote, the court observed that Plaintiffs offered policy arguments as to why, in their view, the “reasonably indicative” standard draws a poor balance between individual rights and public safety; however, in an action under the APA, something more must be shown. Judgment was entered in favor of defendants and against plaintiffs on March 29, 2017. On May 28, 2017, the Plaintiffs filed an appeal to the 9th Circuit Court of Appeals. On November 3, 2017, the Appellants filed an Opening Brief. They argued that the (1) Functional Standard is a substantive rule that is subject to notice and comment as required by the APA, and that the Functional Standard created a binding norm and constituted final agency action. They also argued that (2) the Defendants’ rationales for adopting the ‘reasonably indicative’ standard were arbitrary and capricious if the agency failed to consider an important aspect of the problem or offered an implausible explanation, the defendants initially failed to address Part 23 at all, the rationale for rejecting Part 23 is contrary to the purpose of the Functional Standard, and the post hoc rationales are meritless. The Appellees responded on February 16, 2018. 2018 WL 948517. Appellants’ Reply Brief was submitted on March 30, 2018. 2018 WL 1583408. A Ninth Circuit panel of Circuit Judges Milan D. Smith Jr. and Andrew D. Hurwitz and Circuit Judge Richard K. Eaton agreed with the district court's decision in a January 29, 2019 opinion. It held that the Functional Standard was a final agency outcome that was still legislative in nature, since it influenced internal filing behavior while agency officials had to decide whether to pursue an SAR further. As for Arbitrary and Capricious review, the panel highlighted that while the line between criminal intelligence and SARs was murky, the fact that more investigation is needed for a criminal intelligence investigation than an SAR, which can be as simple as a notification for further review. They believed that this distinction was enough to demonstrate that the SAR process was intentionally crafted with enough consideration to withstand Arbitrary and Capricious review. 913 F.3d 1179. The plaintiffs did not appeal the decision; the case is now closed.
summary: On July 10, 2014, five U.S. citizens who had their information entered into counterterrorism databases and were subjected to law enforcement scrutiny and interrogation, filed suit against the Department of Justice ("DOJ"), the U.S. Attorney General, and the Program Manager of the Information Sharing Environment ("PM-ISE"). Plaintiffs challenged the legality of a domestic surveillance program, and sought declaratory and injunctive relief. They brought suit under the Administrative Procedure Act ("APA")(5 U.S.C. § 706 (2)(A), (D)) and the Declaratory Judgment Act (28 U.S.C. § 2201). Plaintiffs were represented by the American Civil Liberties Union ("ACLU"), the ACLU of California, and Asian Americans Advancing Justice-Asian Law Caucus. Plaintiffs claim that certain DOJ standards encouraging state and local law enforcement and private actors to report activities potentially related to terrorism are invalid. Defendants moved to dismiss the case on October 16, 2014, and plaintiffs filed a response on November 20, 2014. A judgment was entered in favour of defendants and against plaintiffs on March 29, 2017. The Ninth Circuit supported the district court's decision on appeal. The plaintiffs did not appeal the decision; the case is now closed.