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Gill v. Department of Justice

United States District Court, N.D. California

March 27, 2017

WILEY GILL, et al., Plaintiffs,
DEPARTMENT OF JUSTICE, et al., Defendants.


          RICHARD SEEBORG United States District Judge.


         This is a challenge brought under the Administrative Procedures Act (“APA”), to certain aspects of the National Suspicious Activity Reporting Initiative (“NSI”), a nationwide program that collects, vets, and disseminates intelligence with a possible nexus to terrorism. Plaintiffs contend defendant Program Manager-Information Sharing Environment (“PM-ISE”) has adopted a so-called “Functional Standard” that utilizes overly broad criteria to define the types of activities deemed as having a potential nexus to terrorism. As a result, plaintiffs allege, state and local law enforcement authorities submit “Suspicious Activity Reports” (“SARs”) to the federal government even if unsupported by reasonable suspicion of criminal activity, and innocent Americans are “wrongly branded as potential terrorists.” Plaintiffs contend the Functional Standard conflicts with a duly-promulgated DOJ regulation, 28 C.F.R. Part 23 (hereafter “Part 23”), which they assert 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, calls for sharing of SARs whenever they reflect “observed behavior” that is “reasonably indicative of pre-operational planning associated with terrorism or other criminal activity.” The crux of the controversy, therefore, lies in the distinction between the “reasonably indicative” standard, and the “reasonable suspicion” standard. Both sides agree that “reasonably indicative” is a lesser standard which calls for dissemination of SARs even in the absence of “reasonable suspicion.” The question is whether defendants failed to comply with the APA in adopting the “reasonably indicative” standard.

         Plaintiffs contend defendants violated the APA in two ways. First, plaintiffs insist 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 utilized, they argue 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 contend adoption of the Functional Standard was “arbitrary and capricious” because of the alleged conflict with Part 23. Defendants argue there is no conflict that renders adoption of the Functional Standard improper.

         The parties have brought cross-motions for summary judgment. Because defendants have shown that adoption of the Functional Standard did not violate the APA, their motion will be granted and plaintiffs' motion will be denied.


         As plaintiffs describe it, the NSI was created to facilitate the nationwide sharing of information potentially related to terrorism. It is premised on the notion that while state, local, and tribal law enforcement agents - so called “front line” personnel - are well situated to gather that type of information, their reports should be vetted under uniform standards. DOJ and PM-ISE have issued protocols relating to SAR reporting designed to provide such standards for evaluating information collected by front line personnel before it is disseminated nationally. At the time of a prior motion to dismiss in this action, the parties were disputing whether DOJ's protocols and the PM-ISE protocols were separate or not. Now, the parties appear to be in agreement that only the one “Functional Standard” is at issue-and that it was first adopted in 2009, and revised in 2015.

         The SAR process proceeds in three stages: collection of information by front line personnel, vetting by trained analysts at “fusion centers, ” and dissemination to law enforcement nationwide. Front line personnel are allegedly trained in the Functional Standard, collect information about people engaged in activities that purportedly have a potential nexus to terrorism, and submit such information in the form of SARs, either directly to the Federal Bureau of Investigation or to a fusion center.

         Fusion centers, which are federally funded, gather, receive, store, analyze, and share intelligence, including SARs, related to terrorism and other threats. Although the local collecting agencies perform some vetting, the primary responsibility for doing so rests with fusion centers, whose staff are trained in the Functional Standard and review SARs for compliance with that standard. SARs meeting the standard are then disseminated both regionally through the fusion center's database, and nationally through a data base known as “eGuardian.”[1] The FBI oversees eGuardian, which allows law enforcement personnel across the country to access SARs that have been uploaded to it. Plaintiffs allege that the federal government maintains SARs sent to eGuardian for 30 years, even when the FBI has determined that a particular SAR has no nexus to terrorism.[2]


         Although the parties characterize their briefing as constituting cross-motions for “summary judgment, ” they recognize this is not an inquiry under Rule 56 of the Federal Rules of Civil Procedure as to whether there are disputed factual issues for trial. Rather, this is the review on the merits under the APA of the validity of the adoption of the Functional Standard. See, Klamath Siskiyou Wildlands Ctr., 962 F.Supp.2d at 1233; see also Sierra Club v. Mainella, 459 F.Supp.2d 76, 89 (D.D.C. 2006) (“[T]he standard set forth in Rule 56(c) does not apply [in an APA case] because of the limited role of a court in reviewing the administrative record.”); McCrary v. Gutierrez, 495 F.Supp.2d 1038, 1041 (N.D. Cal. 2007) (judicial review of agency action under the APA limited to the administrative record).

         “Under the APA, it is the role of the agency to resolve factual issues to arrive at a decision that is supported by the administrative record, whereas ‘the function of the district court is to determine whether or not as a matter of law the evidence in the administrative record permitted the agency to make the decision it did.'” Sierra Club, 459 F.Supp.2d at 90 (quoting Occidental Eng'g Co. v. INS, 753 F.2d 766, 769-70 (9th Cir. 1985)). In other words, “the district court acts like an appellate court, and the ‘entire case' is ‘a question of law.'” Nat'l Law Ctr. on Homelessness & Poverty v. U.S. Dep't of Veterans Affairs, 842 F.Supp.2d 127, 130 (D.D.C. 2012) (quoting Amer. Bioscience, Inc. v. Thompson, 269 F.3d 1077, 1083 (D.C. Cir. 2001)). “Summary judgment thus serves as the mechanism for deciding, as a matter of law, whether the agency action is supported by the administrative record and otherwise consistent with the APA standard of review.” Stuttering Found. of Am. v. Springer, 498 F.Supp.2d 203, 207 (D.D.C. 2007).


         A. Notice and Comment

         An agency may lawfully issue a so-called “legislative rule” only by using the notice and comment procedure described in the APA, unless it publishes a specific finding of good cause documenting why such procedures “are impracticable, unnecessary, or contrary to the public interest.” 5 U.S.C. § 553(b), (b)(B). In contrast, an agency need not follow the notice and comment procedure to issue an “interpretive rule.” § 553(b)(A). See Hemp Indus. Ass'n v. Drug Enforcement Admin., 333 F.3d 1082, 1087 (9th Cir. 2003). Here, ...

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