[00:00:08] Speaker 04:
May it please the court, Yaakov Roth on behalf of the government.

[00:00:11] Speaker 04:
I'm hoping to reserve about four minutes for rebuttal this morning.

[00:00:15] Speaker 04:
Your honor, this case involves conditions on federal grants.

[00:00:19] Speaker 04:
The district court held that DOT and HUD did not have statutory authority to impose the set of conditions at issue here, and that they were also arbitrary and capricious.

[00:00:31] Speaker 04:
That was wrong, and we would ask the court to vacate the preliminary injunction.

[00:00:35] Speaker 04:
The conditions at issue fall into two categories.

[00:00:38] Speaker 04:
And the first set require grantees to certify their compliance with federal anti-discrimination law.

[00:00:46] Speaker 04:
Those conditions are clearly authorized by Title VI of the Civil Rights Act, which specifically directs all federal agencies to effectuate Title VI's requirement that there not be discrimination in any federally funded program or activity.

[00:01:04] Speaker 05:
May I stop you there because

[00:01:07] Speaker 05:
This is a question of terminology.

[00:01:10] Speaker 05:
As I understood Title VI, it relates to enforcing the law with respect to particular grant programs.

[00:01:20] Speaker 05:
Your argument would expand that to say any programs.

[00:01:25] Speaker 05:
So what is the textual basis for your argument?

[00:01:29] Speaker 04:
Yeah, Your Honor, you're correct.

[00:01:31] Speaker 04:
Title VI applies to any program or activity that receives federal funds.

[00:01:36] Speaker 04:
The regulations then define program or activity.

[00:01:41] Speaker 04:
They define it very, very broadly.

[00:01:43] Speaker 04:
So in practice, it sweeps quite broadly.

[00:01:49] Speaker 04:
But I think you're right, Your Honor is correct, that the statutory authorization is for the federally funded programs or activities.

[00:01:57] Speaker 04:
As I understood their argument below and the district court's holding, it was not that the condition was over broad because it went beyond federally funded programs or activities.

[00:02:08] Speaker 04:
The district court's holding was much more categorical, and the injunction was much broader.

[00:02:12] Speaker 04:
It said, no, you can't do this at all.

[00:02:15] Speaker 04:
So I think if that was their argument.

[00:02:17] Speaker 05:
Can we stop there?

[00:02:19] Speaker 05:
Yeah.

[00:02:20] Speaker 05:
So in effect, you acknowledge that the statute talks about

[00:02:27] Speaker 05:
with respect to particular grant programs.

[00:02:32] Speaker 05:
But your challenge seems to go to everything here.

[00:02:36] Speaker 05:
Now I'm hearing you saying, well, at least the preliminary injunction should be scaled back.

[00:02:42] Speaker 05:
So what is your position in terms of the scope of the injunction?

[00:02:48] Speaker 04:
Your Honor, our position is that the district court's injunction was too broad.

[00:02:53] Speaker 04:
I think the plaintiffs could have made a narrower challenge that was focused on the differential between the federally funded program or activity, as defined by the Title VI regulations, and anything the grantee does.

[00:03:11] Speaker 04:
And that would probably have been a stronger challenge if they had brought it.

[00:03:13] Speaker 04:
It's just not the argument they made, and it's not the argument the district court adopted, but I think that would be open

[00:03:19] Speaker 04:
to them on remand.

[00:03:21] Speaker 04:
I just want to clarify, though, Your Honor.

[00:03:22] Speaker 02:
You had an argument to the District Court?

[00:03:25] Speaker 04:
We invoked Title VI, but their argument to the District Court was not, this condition is overbroad because it goes beyond federally funded programs or activities.

[00:03:34] Speaker 04:
Their argument was, you can't do this at all.

[00:03:37] Speaker 04:
And so we said, no, that's not correct.

[00:03:38] Speaker 04:
We can do it.

[00:03:39] Speaker 04:
Title VI says we have to do it, and we are doing it.

[00:03:42] Speaker 04:
This differential about, well, what about programs that the grantees operate that don't get any federal funds was never kind of the issue that the parties were fighting about, but I think Judge McKeown is right to say that there's a potential issue there.

[00:03:57] Speaker 04:
I think it's also a little bit unclear what the agencies intended on this because

[00:04:02] Speaker 04:
You know, plaintiffs actually cite some language from one of the secretaries, I can't remember which, who said, you know, we have to make sure that federally funded programs aren't engaged in discrimination.

[00:04:13] Speaker 04:
So I think that may have been what they were trying to get at.

[00:04:16] Speaker 04:
And again, if that's the only issue, I don't think we have a problem with that being sorted out and narrowed.

[00:04:22] Speaker 04:
But the injunction as it stands means we can't do what Title VI requires us to do at all, which is a problem.

[00:04:30] Speaker 05:
talk about how this folds into the certification, because as I read the certification requirement, the entities have to certify that they don't operate any programs that promote DEI that violate federal anti-discrimination.

[00:04:51] Speaker 05:
So what's bothering me here is this any programs, and that kind of folds back into my initial question.

[00:05:00] Speaker 05:
So how does a certification interface here with the Title VI?

[00:05:08] Speaker 04:
So I think Title VI authorizes the agencies to ensure that federal grantees are not engaging in discrimination in any program or activity that receives federal funds.

[00:05:21] Speaker 04:
And that was the goal of this certification, was to effectuate

[00:05:25] Speaker 04:
that requirement, and it's really not different in substance than what agencies have done for decades and what plaintiffs acknowledge they've done for decades.

[00:05:34] Speaker 04:
Again, their argument from the beginning and their argument in this court has been, well, the problem is you aren't going to actually enforce civil rights laws as they stand.

[00:05:45] Speaker 04:
We think you're going to apply these conditions to prohibit lawful conduct.

[00:05:52] Speaker 04:
That kind of speculation about how we might misapply civil rights laws in the future is not a basis for saying we don't have statutory authority in the first place to enforce the civil rights laws.

[00:06:05] Speaker 04:
If there is a dispute, a concrete dispute over the substantive meaning of the civil rights laws, that can be litigated if it ever materializes.

[00:06:16] Speaker 04:
But it's not a basis to say that a condition that merely requires compliance with

[00:06:22] Speaker 04:
existing law is somehow invalid.

[00:06:27] Speaker 02:
Let me ask you this.

[00:06:30] Speaker 02:
At the time of the application for the grant when they first respond to the opportunity to apply and they submit their application, isn't there a certification within that process?

[00:06:44] Speaker 04:
The certification, I'm not sure, Your Honor.

[00:06:46] Speaker 04:
I think that the notice of funding opportunity often identifies the conditions that will be included.

[00:06:51] Speaker 04:
And then they're actually written into a grant agreement that follows from the process of the application and the agency's decision of who to select.

[00:06:59] Speaker 02:
And complying with Title VI is not?

[00:07:03] Speaker 04:
Well, I mean, it is.

[00:07:04] Speaker 04:
That's what this is about.

[00:07:05] Speaker 02:
No, but I mean, before.

[00:07:06] Speaker 04:
It always was.

[00:07:07] Speaker 04:
Yeah, it always was.

[00:07:08] Speaker 04:
And the only thing that really changed was as to one of these two agencies, they're specifically calling out

[00:07:14] Speaker 04:
DEI programs that violate the federal civil rights laws as opposed to more generally.

[00:07:20] Speaker 04:
So that's been identified more specifically as something the agency is looking at and focusing on, which was one of the points of this.

[00:07:29] Speaker 04:
We think some of these programs have gone under the radar and have been tacitly accepted, but

[00:07:36] Speaker 04:
No, if they violate the civil rights laws, it doesn't matter if you call it DEI, it's still illegal and we're paying attention to this.

[00:07:42] Speaker 04:
And this condition is designed to put them on notice that that's the agency's view and they're going to hold them to it.

[00:07:48] Speaker 04:
And again, there's nothing wrong with that.

[00:07:51] Speaker 04:
Under Title VI, that's what the agencies are supposed to do.

[00:07:55] Speaker 01:
this injunction prevents the agencies from doing it.

[00:08:07] Speaker 01:
applicable federal anti-discrimination program laws.

[00:08:11] Speaker 01:
And you're suggesting that that might, as written, violate Title VI, but what would be appropriate is any program funded by Title VI does not violate any federal anti-discrimination law.

[00:08:24] Speaker 04:
Any program or activity that receives federal funds.

[00:08:26] Speaker 01:
That receives federal funds.

[00:08:27] Speaker 04:
Federal program or activity for purposes of Title VI, and you, Your Honor, can look at the regulations that define it, they're very broad terms.

[00:08:35] Speaker 04:
So it's not just

[00:08:38] Speaker 04:
you know, we're giving you this money for this narrow, you know, subsidies for some bus fare or something.

[00:08:47] Speaker 04:
So it's that, only that strip that can't discriminate.

[00:08:50] Speaker 04:
The regulations sweep more broadly in sort of defining the scope of the program.

[00:08:55] Speaker 01:
Any federal, where is that textually?

[00:08:58] Speaker 05:
Where do you find that?

[00:08:59] Speaker 05:
Because maybe that goes back to my first question, because the regulations also talk about

[00:09:08] Speaker 05:
specific grant programs, not all programs.

[00:09:12] Speaker 05:
And you indicated, well, that's true with Title VI, but now you suggest the regulations somehow have more particularity, but I didn't see that.

[00:09:22] Speaker 05:
Point me to where I'm either missing that or you're finding that.

[00:09:28] Speaker 04:
So Title VI is just 42 USC 2000D.

[00:09:32] Speaker 04:
It says, no person in the United States shall on the ground of race, color, or national origin be excluded from participation in, denied the benefits of, or subjected to discrimination under any program or activity receiving federal financial assistance.

[00:09:44] Speaker 04:
And then the words program or activity are then defined by regulations.

[00:09:52] Speaker 04:
to sort of set, what is the scope of that?

[00:09:54] Speaker 04:
Like, what are we looking at?

[00:09:55] Speaker 04:
What is the frame of reference for that program?

[00:09:57] Speaker 05:
But where are the regulations?

[00:09:58] Speaker 05:
Because they're talking about these programs.

[00:10:01] Speaker 05:
They're not in particular grant programs.

[00:10:05] Speaker 05:
So where in the regulations do you think it somehow narrows the scope of that?

[00:10:14] Speaker 04:
I don't think it narrows the scope here.

[00:10:15] Speaker 04:
I'm not sure I understand the question.

[00:10:18] Speaker 04:
It doesn't narrow the scope.

[00:10:21] Speaker 04:
We can ensure that the grantees are not engaged in discrimination as to any program or activity that receives federal funds.

[00:10:30] Speaker 04:
And that's our position.

[00:10:32] Speaker 04:
And that's what the condition is designed to do.

[00:10:33] Speaker 04:
I understand.

[00:10:34] Speaker 04:
So your first question to be well, the condition as written may sweep more broadly than that.

[00:10:38] Speaker 04:
And my response was, yeah.

[00:10:40] Speaker 04:
And if that had been their argument, they might have been right.

[00:10:41] Speaker 04:
But that wasn't their argument.

[00:10:43] Speaker 04:
And that's this.

[00:10:44] Speaker 05:
Did you make did you make this argument in the district court that you're making now?

[00:10:49] Speaker 04:
We made the argument that Title VI... I understand you made a big, broad Title VI, but you don't see the nuances of this being... No, that's right, Your Honor, but again, that's because that wasn't the nature of the challenge that the plaintiffs pursued.

[00:11:04] Speaker 04:
They didn't say it was an over-broad condition.

[00:11:06] Speaker 04:
They said, agencies can't do this.

[00:11:08] Speaker 04:
This is completely beyond their statutory authority.

[00:11:10] Speaker 04:
And that's what the district court said.

[00:11:12] Speaker 04:
You have no authority to put any new conditions on the grant.

[00:11:14] Speaker 04:
It's what Congress said in the HUD and DOT specific statutes.

[00:11:21] Speaker 04:
Those are the only conditions.

[00:11:22] Speaker 04:
That's wrong.

[00:11:23] Speaker 04:
We are allowed under Title VI to put these conditions on, and that's why we're asking the court to reverse that aspect of the injunction as overbroad.

[00:11:32] Speaker 04:
Now, if I could turn to the second set of conditions, which are the

[00:11:36] Speaker 04:
HUD Homelessness Grant conditions, and they're on the use of the grant funds.

[00:11:41] Speaker 04:
So these ones are different because they relate specifically to the use of the grant funds by the grantee and not the grantee's conduct more generally.

[00:11:50] Speaker 04:
The statute here in subsection B8 of the statute gives HUD express authority to impose terms and conditions for the efficient and effective implementation of the program.

[00:12:04] Speaker 04:
And that has to be true because Congress doesn't write these lengthy contracts on its own.

[00:12:09] Speaker 04:
Congress sets out the broad parameters and agencies fill in the details using these terms and conditions.

[00:12:16] Speaker 04:
Now, I want to be clear, this is not an unlimited power to put any condition that we want on federal funds.

[00:12:21] Speaker 04:
It has to be consistent with the statute.

[00:12:23] Speaker 04:
It has to be reasonably related to the efficient and effective execution of the program.

[00:12:31] Speaker 04:
And it has to advance the goals of the program.

[00:12:33] Speaker 04:
But these conditions do that.

[00:12:34] Speaker 04:
And they really do two things.

[00:12:36] Speaker 04:
Number one, they say don't use the federal funds in ways that would violate federal law.

[00:12:41] Speaker 04:
And number two, don't spend them on things that are not germane to the program.

[00:12:47] Speaker 04:
If you're spending it in ways that are going to violate federal law, that's undercutting the integrity of the program.

[00:12:52] Speaker 01:
Could you articulate that in the context of the promote elective abortions?

[00:12:57] Speaker 04:
Right.

[00:12:58] Speaker 04:
So that one has both aspects of this.

[00:13:01] Speaker 04:
The condition on abortion says don't fund or promote elective abortions.

[00:13:05] Speaker 04:
Well, funding elective abortions is illegal under the Hyde Amendment.

[00:13:08] Speaker 04:
So that's just implementing a pre-existing obligation they have.

[00:13:12] Speaker 04:
Promoting elective abortions is not prohibited by the Hyde Amendment, but it has nothing to do with homelessness.

[00:13:17] Speaker 04:
And that's actually something they say over and over again.

[00:13:19] Speaker 04:
They say, well, abortion doesn't.

[00:13:21] Speaker 04:
What does abortion have to do with homelessness?

[00:13:22] Speaker 04:
What does illegal immigration have to do with homelessness?

[00:13:25] Speaker 04:
that's our point these things are not germane to the program they are not advancing the goals of the program so please don't spend this homelessness money on those things it's not really clear to me why they think they could or ever we're going to planning to spend the homelessness money on these things but you know the conditions just make clear don't spend it on things that have nothing to do with homelessness it's hard for me

[00:13:48] Speaker 05:
Yeah, I hear your point there and maybe the parties are talking past each other here to some degree, but let's say with respect to homelessness that you set up a facility or you have health facilities, either mental health or medical health that might help somebody after they had an abortion.

[00:14:11] Speaker 05:
So you haven't funded the abortion, but now somebody has.

[00:14:15] Speaker 05:
mental health issues or medical issues would that be in violation of the height amendment or the conditions.

[00:14:23] Speaker 04:
I don't think so I don't think that would involve promoting abortion.

[00:14:27] Speaker 04:
I would say your honor part of the problem here is because we're doing this.

[00:14:31] Speaker 04:
facially before these conditions were implemented, you know, we don't really have any record of how they will be applied.

[00:14:39] Speaker 04:
Any concrete disputes over meaning are somewhat premature and hypothetical, which makes it a little bit more challenging to have this discussion.

[00:14:47] Speaker 04:
But I think on the face of it, it's hard to say these conditions aren't related to the efficient or effective implementation of the program.

[00:14:57] Speaker 05:
So as long as

[00:15:00] Speaker 05:
the program meets the Hyde Amendment then you don't have any objection.

[00:15:06] Speaker 04:
So the Hyde Amendment part is for funding the abortions and the grant funds are not supposed to be used to promote

[00:15:15] Speaker 04:
uh... abortions that the fight amendment could not pay for so that would be in other words like by counseling or side we recommend you know put up a billboard and in the you know it's a homeless shelter and we're gonna put up a billboard that says you know in abortion call so and so yeah that and and i think the view of the agency is

[00:15:33] Speaker 04:
That's not closely enough related to the goals of ending homelessness.

[00:15:37] Speaker 04:
We don't want to pay for that.

[00:15:38] Speaker 04:
And again, it's only these are limited to the use of the grant funds.

[00:15:42] Speaker 04:
So if these local jurisdictions want to promote abortion or promote illegal immigration or promote gender ideology using their own money,

[00:15:51] Speaker 04:
They're allowed to do that.

[00:15:53] Speaker 04:
These conditions are simply about how they can use the federal funds under these programs.

[00:16:00] Speaker 01:
And how are we supposed to define effective and efficient manner?

[00:16:03] Speaker 01:
Because that obviously could be up to dispute.

[00:16:08] Speaker 01:
What's an effective use or what's an efficient use of the funding?

[00:16:12] Speaker 04:
Well, I mean, I think it's a deferential standard that we look at what did the agency do?

[00:16:18] Speaker 04:
Can they explain why this is reasonably related to those goals?

[00:16:22] Speaker 04:
And if yes, that that's something the agency should be empowered to do under the statute.

[00:16:26] Speaker 04:
Again, the plaintiff's position has been very categorical.

[00:16:29] Speaker 04:
So they've sort of said, well, you can't do any of this because this relates to policy.

[00:16:34] Speaker 04:
Well, there's nothing in the statute that says there can't be policy judgments embedded in determinations about efficiency and efficacy.

[00:16:42] Speaker 04:
Of course, if you're trying to figure out what's going to be effective, that's partially a policy question.

[00:16:47] Speaker 04:
Now, you can't contradict Congress's policy.

[00:16:50] Speaker 04:
If Congress said you've got to do it one way, the agency can't say no.

[00:16:54] Speaker 04:
within the parameters that Congress has established, the agency does have some discretion in implementing and ensuring that the program runs properly.

[00:17:04] Speaker 01:
And what about the argument that they have to use the SAVE verification system where they argue that that would be onerous and some of them don't have access to that?

[00:17:14] Speaker 04:
Yeah, right.

[00:17:14] Speaker 04:
So that's a good example.

[00:17:16] Speaker 04:
So there's no dispute that under PURWORA,

[00:17:20] Speaker 04:
certain aliens are ineligible for certain public benefits, federally funded benefits.

[00:17:26] Speaker 04:
They don't dispute that.

[00:17:28] Speaker 04:
And so what we've said, and that they have to do some verification of that.

[00:17:31] Speaker 04:
And so we've said, all right, well, the way you should verify that is use the SAVE system, which we've made available for free to local jurisdictions, because we know it works.

[00:17:42] Speaker 04:
It's free.

[00:17:43] Speaker 04:
It's available.

[00:17:44] Speaker 04:
Use that one to comply with federal law and to ensure that the money we're giving you isn't being spent on people who are ineligible for it.

[00:17:53] Speaker 04:
I don't see how that could not be reasonably related to making the program efficient and effective.

[00:17:58] Speaker 04:
It's making sure the benefits go to the people who are eligible for the benefits.

[00:18:03] Speaker 04:
And again, their only argument was, you know, this is going to be hard for us to pay for it.

[00:18:07] Speaker 04:
It's free now.

[00:18:08] Speaker 04:
It wasn't always, but as of April of last year, it was made free for local jurisdictions.

[00:18:14] Speaker 01:
It seems like you could ask them to spend some time and money to get access to all those millions of dollars, right?

[00:18:21] Speaker 04:
Well, they have to.

[00:18:22] Speaker 04:
I mean, they have to.

[00:18:23] Speaker 04:
They have an obligation to verify, and they don't dispute they have an obligation to verify.

[00:18:26] Speaker 04:
I think they're just saying, well, we don't want to use your way of doing it.

[00:18:29] Speaker 04:
Well, why?

[00:18:30] Speaker 04:
It's free, it's available, and it works.

[00:18:33] Speaker 04:
So the agency should be allowed to make that kind of determination as to how they comply with their legal obligations.

[00:18:39] Speaker 05:
How does that mesh then with

[00:18:42] Speaker 05:
the congressional requirement that the attorney general is supposed to set out verification standards via regulation.

[00:18:49] Speaker 05:
This is now this grant condition.

[00:18:51] Speaker 05:
So explain how that interfaces.

[00:18:55] Speaker 04:
Yeah.

[00:18:55] Speaker 04:
So the statute said that the attorney general was supposed to put out regulations to direct the states on how to establish verification regimes.

[00:19:06] Speaker 04:
And then once they gave states that direction, the states were supposed to get two years to build those programs for implementation.

[00:19:14] Speaker 04:
Those regulations never happened.

[00:19:16] Speaker 04:
This is from the 90s.

[00:19:17] Speaker 04:
Instead, there was an interim rule that sort of provided some baseline directives.

[00:19:24] Speaker 04:
And those are still in force, because that's never been superseded by the regulations that were called for.

[00:19:30] Speaker 04:
But under that interim rule that went into effect in the 90s,

[00:19:35] Speaker 04:
They have to do some verification.

[00:19:38] Speaker 04:
They're supposed to do verification.

[00:19:39] Speaker 04:
And again, all we've done here is pointed them to a verification system that is available off the shelf for free that they can use.

[00:19:48] Speaker 04:
And so even if you view this as going beyond what Parora requires, and I guess it does go beyond what Parora requires, it's going beyond it in a way that makes the program run more efficiently and effectively.

[00:20:01] Speaker 04:
because, again, it's going to work to ensure that the federally funded benefits go only to the people who are eligible for those benefits.

[00:20:13] Speaker 05:
So just to cut to the chase, it doesn't meet the statute.

[00:20:17] Speaker 05:
The regulations don't require this.

[00:20:22] Speaker 05:
This goes beyond what's required.

[00:20:25] Speaker 05:
But it's effective.

[00:20:27] Speaker 05:
Is that your position?

[00:20:28] Speaker 04:
Yeah, I think that's right, Your Honor.

[00:20:29] Speaker 04:
So the statute only requires verifying.

[00:20:32] Speaker 04:
The condition now tells them how to verify.

[00:20:33] Speaker 05:
Well, it doesn't just require verifying.

[00:20:35] Speaker 05:
It requires these regulations.

[00:20:36] Speaker 05:
I mean, we can't overlook congressional mandates.

[00:20:40] Speaker 04:
Sure, sure.

[00:20:40] Speaker 04:
The statute requires them to verify.

[00:20:43] Speaker 04:
The regulations require them to verify.

[00:20:45] Speaker 04:
The condition now tells them what system to use to verify.

[00:20:50] Speaker 04:
It is going beyond.

[00:20:51] Speaker 04:
It's meaningful in saying, this is how we want you to do it.

[00:20:55] Speaker 04:
We want you to do it by using this free product that DHS has made available to you.

[00:20:59] Speaker 01:
I thought the condition allowed them to use an equivalent.

[00:21:04] Speaker 01:
If they don't want to use save, they have to figure out another way that works.

[00:21:07] Speaker 04:
That's right.

[00:21:08] Speaker 04:
It could be an equivalent if we approve the equivalent.

[00:21:10] Speaker 01:
It doesn't really go beyond.

[00:21:12] Speaker 01:
federal law, because it's just saying you have to use some system to verify it.

[00:21:17] Speaker 04:
It has to be an equivalent that is approved by the federal government.

[00:21:22] Speaker 04:
It gives them an option, but it's more specific.

[00:21:26] Speaker 04:
But that is within the scope of the authority that was given to HUD to impose terms and conditions for the program to ensure that it's effective and efficient.

[00:21:39] Speaker 04:
Do you want to save some time?

[00:21:41] Speaker 04:
Yeah, I'll save my remaining time.

[00:21:42] Speaker 04:
Thank you, Your Honor.

[00:21:54] Speaker 00:
Good morning, Your Honors.

[00:21:55] Speaker 00:
Paul Lawrence for the local governments here.

[00:21:57] Speaker 00:
I think we all agree that Congress holds the spending power and they can set criteria and establish grant programs under the terms and conditions that they create.

[00:22:09] Speaker 00:
And what has happened here is that the Trump administration has added new conditions to these grant programs that have been going on for years that were in the middle of process at the time these new conditions were added to meet the Trump's administration's policies, although those are beyond anything that's been authorized by Congress.

[00:22:30] Speaker 00:
or anything that is allowed by Title VI or anything that's allowed by Piora.

[00:22:36] Speaker 00:
So on that basis, we have asked the court and asked this court to look at the grad programs that are particularly at issue and ask whether or not they include, reference, or encompass

[00:22:48] Speaker 00:
the grand conditions which the Trump administration is now seeking to impose that are beyond anything that was imposed before.

[00:22:56] Speaker 00:
And the district court correctly held that they are not.

[00:22:59] Speaker 00:
And therefore, beyond the statutory authority of the agencies to enact,

[00:23:04] Speaker 00:
and in violations, separations of powers, and also that they were arbitrarily and capriciously adopted because there was no process or reasoning to explain why this change in the conditions that were being applied to the local governments at issue.

[00:23:22] Speaker 00:
So I want to start with I think one of the questions that you had and that my friend argued.

[00:23:29] Speaker 00:
What we're asking here is to look at the grant programs.

[00:23:33] Speaker 00:
We're not making

[00:23:34] Speaker 00:
suggestions that these are just over broad as to all programs.

[00:23:40] Speaker 00:
We have asked the court to look at these particular grant programs and decide whether or not these conditions are consistent with those grant programs as authorized by Congress.

[00:23:52] Speaker 02:
You mean the grant funds received by the public entities?

[00:23:57] Speaker 00:
The grant funds received by the public entities, I think I heard, which we agree that

[00:24:04] Speaker 00:
what these conditions are trying to apply to are the programs that are funded by

[00:24:09] Speaker 00:
the federal government.

[00:24:10] Speaker 00:
All these programs are funded in part by the federal government.

[00:24:13] Speaker 00:
I don't know the distinction that he's trying to make that if a local government contributes money, that they can then promote abortion with their money, but they can't promote abortion with federal money.

[00:24:27] Speaker 00:
I don't understand the distinction.

[00:24:28] Speaker 00:
I think these conditions go to programs.

[00:24:31] Speaker 02:
So let's say there's a HUD grant that's made to a local entity, and the local entity, local governmental entity,

[00:24:38] Speaker 02:
then provides some of that money to a non-profit to carry out particulars.

[00:24:43] Speaker 00:
Yes.

[00:24:45] Speaker 02:
Well, again... The condition applies, is it your position that the condition applies, and does the adjunction extend to the non-profit?

[00:24:52] Speaker 00:
Yes, so in the HUD particular, because we have the continuum of care program and grants there, those are often carried out through

[00:25:02] Speaker 00:
agencies or through entities that the local governments work with and the injunction specifically does extend to protect those agencies from having to bear unconstitutional conditions in violation of the APA.

[00:25:20] Speaker 02:
Are you just referring to the local government or are you referring to the non-profits as well?

[00:25:25] Speaker 00:
The way that the injunction reads, it would refer both to local government agencies.

[00:25:31] Speaker 00:
For example, King County has a regional homeless authority, which is an agency, but some other of the local governments do act with nonprofits as carrying out some of these grant conditions.

[00:25:43] Speaker 00:
Okay.

[00:25:43] Speaker 05:
Thank you.

[00:25:43] Speaker 05:
Could you go back to the argument I think that the government is making that even if

[00:25:50] Speaker 05:
The government acknowledges the language of Title VI, having some restrictions on programs, that the injunction goes too far.

[00:26:02] Speaker 05:
So it's not really capturing just programs, as you indicate, but it's everything and therefore it should be narrowed.

[00:26:13] Speaker 00:
Well, there are several problems, we believe, with what we've called the discrimination and the District Court called the discrimination conditions.

[00:26:21] Speaker 00:
One of which is that they do, on their face, extend beyond simply this idea of spending particular federal dollars in a particular program.

[00:26:30] Speaker 00:
Secondly, they go beyond what Title VI says and requires.

[00:26:36] Speaker 00:
In talking about grant programs, it's important to understand that

[00:26:40] Speaker 00:
the courts have recognized these are like contracts so that we have to understand what these grant conditions mean.

[00:26:46] Speaker 00:
And I think I heard my friend acknowledge that the agencies were less than clear as to what these grant conditions mean.

[00:26:54] Speaker 00:
So it's entirely appropriate for the district court to look at and your court to look at what did the agency say about the grant conditions when they were being issued.

[00:27:04] Speaker 00:
So the first day that the HUD grant condition

[00:27:06] Speaker 00:
was issued, the secretary announced in a press release that these were to align with the Trump administration's effort to NDEI programs.

[00:27:19] Speaker 00:
That was reiterated two days later.

[00:27:21] Speaker 01:
That's not what the grant program says.

[00:27:23] Speaker 01:
That's not what the grant condition says.

[00:27:25] Speaker 00:
Well, what we perceive and we think is right, that if you're looking at a grant condition and trying to understand what it says and trying to understand whether it falls within congressional authority,

[00:27:36] Speaker 00:
you in this case and in all cases, contract principles apply to the grants.

[00:27:41] Speaker 00:
But this is a facial challenge, though.

[00:27:42] Speaker 01:
You're saying it's inappropriate in all respects.

[00:27:45] Speaker 01:
But you would concede, if we were to limit the injunction so that it only says that instead of saying any program, it says any program that receives federal funding, that that would be consistent with Title VI, right?

[00:27:59] Speaker 00:
With a couple of caveats.

[00:28:01] Speaker 00:
First of all, it would have to include the caveat that under existing law, as the courts have set forth.

[00:28:09] Speaker 01:
Where is that from?

[00:28:10] Speaker 01:
Well, even in the... Because that seems to be a challenge to how it's enforced, right?

[00:28:15] Speaker 01:
You're worried that they're going to enforce it in an over-broadway.

[00:28:18] Speaker 00:
We all understand that under Supreme Court authority, grant conditions have to be clear as to what they mean and what they are telling the recipients of the grants to do.

[00:28:27] Speaker 00:
Well, is that condition based off of Title VI?

[00:28:30] Speaker 01:
If so, where?

[00:28:32] Speaker 00:
That is a general rule that the courts have applied to any conditions that are being set by the spending clause.

[00:28:40] Speaker 00:
In other words, if Congress, through the spending clause, is going to give you money and put conditions on it, they have to be clear about what they are doing in order to give the local government the opportunity to say, yes, I accept or no, I don't accept.

[00:28:53] Speaker 01:
So you're just asking that that would say that any existing federal anti-discrimination laws?

[00:28:58] Speaker 00:
as existing, as defined by the courts as of the date that you're signing.

[00:29:04] Speaker 01:
Because I think what the problem here is, again... So you're saying, could a state violate the law as long as the court hasn't found it, as of today?

[00:29:15] Speaker 00:
No, I'm not saying that.

[00:29:16] Speaker 01:
I don't understand why, how you could have that extra condition.

[00:29:19] Speaker 00:
Well, because, again, under contract principles that this court and other courts have used to understand conditions, the federal government has, the agencies have said, for example, Secretary Turner said that all DEI programs are presumptively invalid.

[00:29:37] Speaker 01:
Again, but this just goes to enforcement and how it's enforced.

[00:29:40] Speaker 00:
This is a facial challenge.

[00:29:42] Speaker 00:
First of all, this is not a facial challenge.

[00:29:44] Speaker 00:
This is not a due process First Amendment case.

[00:29:47] Speaker 00:
This is an APA case.

[00:29:49] Speaker 00:
doesn't have that distinction one way or the other.

[00:29:52] Speaker 00:
It simply says, look at what the agency did and look at whether it's in their statutory authority or constitutional authorities to do.

[00:30:00] Speaker 00:
So it's really a different case because you're looking at the particular grant programs and looking at the particular grant conditions.

[00:30:08] Speaker 05:
The other thing which you didn't hear, I'm sorry.

[00:30:11] Speaker 05:
So as a baseline then, when you get your grant and you maybe got the grant some years ago,

[00:30:19] Speaker 05:
it would be permissible to infer you can't violate Title VII, for example.

[00:30:24] Speaker 05:
Would that be fair?

[00:30:25] Speaker 00:
Yes, I think one thing that we are very concerned about, which you would have to address even if you were going to go down the path, is the materiality certification.

[00:30:35] Speaker 00:
And that is something new and different.

[00:30:38] Speaker 00:
In fact, my friend in arguing the Women's Trades case last week, I believe it was in the Seventh Circuit, acknowledged that what's going on here is, in addition to clarifying, is to give additional remedies under the False Claims Act.

[00:30:52] Speaker 00:
So you have the certification

[00:30:54] Speaker 00:
that you are agreeing that this is material, which is a high standard.

[00:30:59] Speaker 00:
The government's trying to put pressure on you and to enhance the ability to claim you violated your certification under the False Claims Act by including that.

[00:31:10] Speaker 00:
And the False Claims Act has substantively different remedies than Title VI.

[00:31:15] Speaker 00:
So if you violate the False Claims Act, you would be subject to civil, perhaps criminal penalties, and trouble damages.

[00:31:22] Speaker 00:
If you violate Title VI, there's a whole process under Title VI where they come to you and say you're violating Title VI.

[00:31:28] Speaker 00:
You have an opportunity to adjust your program to meet the requirements that the government says.

[00:31:33] Speaker 00:
If you do litigate it, there has to be a hearing.

[00:31:35] Speaker 00:
There has to be findings.

[00:31:36] Speaker 00:
You have an opportunity.

[00:31:37] Speaker 00:
And the conclusion of that is not of losing civil penalties, not paying trouble damages.

[00:31:44] Speaker 01:
So this materiality is- That certification is not conceding you're going to lose a CA claim.

[00:31:50] Speaker 01:
It's just agreeing to a factual predicate, a narrow factual predicate.

[00:31:54] Speaker 00:
Well, it's not a narrow factual predicate.

[00:31:57] Speaker 00:
Materiality is a key thing there.

[00:32:01] Speaker 00:
And as I said,

[00:32:01] Speaker 00:
The government has in other cases acknowledged that this is trying to create remedies that might not otherwise exist under Title VI in order to enforce their view of what Title VI requires.

[00:32:14] Speaker 01:
Again, if you are going to go down the road of saying existing law, then you have to get rid of the certification petition, because here the government's telling you... Those are the two things that you want existing under existing laws interpreted by courts today and getting rid of the certification?

[00:32:33] Speaker 00:
For the discrimination petition.

[00:32:34] Speaker 00:
I don't think that this has anything to do with the gender ideology.

[00:32:38] Speaker 00:
or the immigration enforcement, that's a separate issue.

[00:32:43] Speaker 00:
Yes, because we do believe that what's happening here is that the government has announced

[00:32:49] Speaker 00:
interpretations of Title VI that are not consistent with court rules and they intend to enforce that in terms of the certification of materiality requirements.

[00:32:59] Speaker 00:
So yes, I think you have to deal with both rewriting, so to speak, the discrimination condition and getting rid of the materiality certification under the False Claims Act.

[00:33:12] Speaker 00:
So I'm going to move on, I guess, to the question about the immigration, abortion, and gender ideology conditions.

[00:33:22] Speaker 00:
The government does not point to any provision of any of the grant

[00:33:26] Speaker 00:
programs that are an issue that has been authorized by Congress that talk about these issues.

[00:33:32] Speaker 00:
There's no reference to immigration, abortion, gender ideology in any of those programs.

[00:33:38] Speaker 00:
So instead of referring to something specific in what Congress intended in terms of the program's goals, policies, and criteria, they are relying on this provision that falls into a category of additional conditions that

[00:33:55] Speaker 00:
the agencies can't apply that are really more in the nature of procedurally, how do we make this program more efficient?

[00:34:02] Speaker 00:
They have nothing to do and don't suggest that they allow the government agencies to make policy decisions to apply those to

[00:34:13] Speaker 00:
the grant conditions.

[00:34:14] Speaker 00:
If you read that clause that way, the efficiency clause provision that way, you've basically totally undermined the ability of Congress to set conditions, or you're saying that Congress gave this... How is that true?

[00:34:28] Speaker 01:
Well, because... Because Congress could always disagree with any condition they impose.

[00:34:33] Speaker 00:
Well, first of all, these are significant conditions.

[00:34:36] Speaker 00:
And under the Loper-Brite line of cases, Congress doesn't just give broad discretion to make significant decisions to agencies.

[00:34:45] Speaker 00:
Congress is supposed to speak when they're doing that.

[00:34:47] Speaker 00:
So to try to take an efficiency and effectiveness clause and use that as a loophole to impose policy conditions that Congress has not

[00:34:58] Speaker 00:
imposed that are unrelated to the program codes that Congress has imposed.

[00:35:03] Speaker 01:
If those policies do deal with efficiency, what's wrong with that?

[00:35:07] Speaker 00:
Well, because they don't have anything to do with what Congress says the goals are supposed to do.

[00:35:13] Speaker 00:
I don't think that they are actually intended to improve efficiency.

[00:35:17] Speaker 00:
They're intended to limit how funds are used in a way that Congress has not authorized.

[00:35:23] Speaker 01:
So if the condition said that you can't use HUD funding to buy red balloons,

[00:35:29] Speaker 01:
That's substantive, right, and Congress didn't legislate on it, but it seemed to increase efficiency of homeless money, like not buying red balloons seems to be a waste of that money, correct?

[00:35:40] Speaker 00:
I think the government would have argument, you could argue one way or another, if the red balloons were to try to give notice to people come here to receive your homelessness services, but putting that aside, I think the problem is that

[00:35:54] Speaker 00:
That would be going too far to say that extends to something like the SAVE program.

[00:35:59] Speaker 00:
Let's talk about that.

[00:36:00] Speaker 01:
So you're saying that they can't put a condition that you can't use HUD money to buy big red balloons?

[00:36:07] Speaker 00:
I think if they objected to big red balloons and the local government said, we're using big red balloons in order to make people aware this is where you go to get your homelessness services, I think that would be a perfectly legitimate use of red balloons and that would not be subject.

[00:36:21] Speaker 01:
So a court can then impose, then we have to privilege the local government's belief of what's efficient over the federal governments even though the HUD statute says

[00:36:33] Speaker 01:
that the president can impose what's effective and efficient manner.

[00:36:37] Speaker 00:
Well, they said agencies, but putting that aside, again, the subject matter that's being imposed here have to be within the purposes of Congress, and these are not.

[00:36:50] Speaker 00:
Let me go to the two things that he discussed.

[00:36:53] Speaker 01:
What do you mean, the subject matter has to be provided by Congress?

[00:36:56] Speaker 00:
No, it has to be within the goals and the way that Congress envisioned the program.

[00:37:00] Speaker 01:
And then they envisioned that it'd be used in an effective and efficient manner as determined by the Secretary.

[00:37:04] Speaker 00:
Well, here, again, I'd like to go to the specifics here.

[00:37:07] Speaker 00:
So, Peora and the save requirement.

[00:37:11] Speaker 00:
Congress actually set out exactly how to deal with the situation.

[00:37:16] Speaker 00:
They set out in Peora that the Secretary DOJ was supposed to go through and determine what is the proper way to verify.

[00:37:27] Speaker 00:
They could use save, but to do so, Congress said you have to do it through a regulation.

[00:37:33] Speaker 00:
Well, that's not what the regulation says.

[00:37:35] Speaker 00:
The regulation does not require save.

[00:37:37] Speaker 00:
And here the administration is saying, no, you have to require save.

[00:37:40] Speaker 05:
So we have a situation where... Let me just stop there because maybe I misheard the government, but I thought the government said, or equivalent.

[00:37:51] Speaker 00:
Well, the PIORA specifically spoke to the SAVE program.

[00:37:56] Speaker 00:
And that's the problem here.

[00:37:57] Speaker 00:
The PIORA said, you can adopt the SAVE program, but you have to do that by regulation.

[00:38:02] Speaker 00:
And instead of doing that, the government didn't adopt SAVE as a way to verify.

[00:38:09] Speaker 00:
So what here, the agency is, again, overriding what Congress has told them to do, is that if you want to do this and require SAVE, there's a procedure to do that.

[00:38:20] Speaker 00:
But they haven't done that, so they're trying to short-circuit that and override what Congress has said by using the SAVE program.

[00:38:25] Speaker 01:
But why couldn't the Secretary just say, I think it is an effective and efficient manner to use the SAVE program?

[00:38:30] Speaker 00:
Because Congress has told the government, has told all the agencies, here's how you go through a process of deciding that the SAVE program is an appropriate program.

[00:38:40] Speaker 00:
You didn't do that.

[00:38:42] Speaker 00:
But that's a separate statute.

[00:38:45] Speaker 01:
They hear this says that the Secretary could decide what's effective and efficient, and why couldn't the Secretary deem the SAVE program an effective and efficient manner?

[00:38:55] Speaker 00:
Because the condition, you go back to the terms of the condition at issue here, specifically in reference to the PIORA program.

[00:39:01] Speaker 00:
So the condition is adopting into its substance PIORA.

[00:39:06] Speaker 00:
That's what the condition says.

[00:39:07] Speaker 01:
I mean, that's a separate thing, though.

[00:39:11] Speaker 01:
You're not disagreeing, though, that a secretary could make the determination that using the safe system is effective and efficient.

[00:39:19] Speaker 01:
You're just saying that that's inconsistent with PIORA.

[00:39:22] Speaker 01:
While it is inconsistent with PIORA and if there were no guidance, again, I don't know how... In the world where PIORA doesn't exist, where there's a SAVE verification program that's free and available to the states, can the Secretary then say that using the SAVE verification program is an effective and efficient manner and therefore it's a condition of using this funding?

[00:39:47] Speaker 00:
Well, again, that hypothetical world doesn't exist because the requirement... I know it doesn't exist, but just tell me what the answer is.

[00:39:55] Speaker 00:
Even the requirement limiting use of the benefits to certain categories of migrants and citizens.

[00:40:03] Speaker 00:
comes out of PIORA.

[00:40:04] Speaker 00:
So I don't understand how you, if PIORA did not exist, there wouldn't be a limitation on how these funds could be used.

[00:40:12] Speaker 00:
So I don't know that how you can create a hypothetical where you've allowed the PIORA substance to apply

[00:40:19] Speaker 00:
but not Piora as an entity.

[00:40:20] Speaker 00:
It's only because of Piora that these funds are limited to certain categories of immigrants and to US citizens.

[00:40:26] Speaker 01:
Well, you could still have Piora, but not that sub-provision that requires the promulgation of regulation, couldn't you?

[00:40:34] Speaker 00:
You certainly could have Piora with that.

[00:40:36] Speaker 01:
So assume that the sub-provision does not exist.

[00:40:39] Speaker 05:
Well, let me go back to the government's argument, or I shouldn't say argument, but statement.

[00:40:45] Speaker 05:
The government acknowledged that this goes beyond what is required.

[00:40:51] Speaker 00:
Exactly.

[00:40:52] Speaker 05:
So they said that, but they said it's also, it's free, useful, and effective.

[00:40:58] Speaker 05:
And then the government said, so we now offer you this system, but you could use that system or the equivalent, which would then apparently go back to these interim rules

[00:41:13] Speaker 05:
because the regulations weren't adopted.

[00:41:15] Speaker 05:
Is there a problem with that where the government says you can use this but doesn't mandate it?

[00:41:22] Speaker 00:
No, it's the mandate.

[00:41:24] Speaker 00:
It's the mandating.

[00:41:25] Speaker 00:
Yes, because no one has alleged that the local governments are not using

[00:41:31] Speaker 00:
uh... methods that are approved under the existing regulations to verify so yes could the government say or a and i think local governments though you could use save if you wanted to but being mandated to is beyond what congress is offering

[00:41:48] Speaker 02:
about save that the local governments don't really care for?

[00:41:53] Speaker 00:
Well, first of all, I think originally, clearly it was a matter of money, and clearly a matter of training, and clearly a matter of availability.

[00:42:02] Speaker 00:
So in the middle of this process that was made free, it maybe changes that issue.

[00:42:09] Speaker 00:
I think there are also, and without getting into details that are beyond the scope, my general understanding that there are issues with the veracity

[00:42:18] Speaker 00:
of the information in the SAVE program.

[00:42:20] Speaker 00:
Obviously, it's been used in other instances.

[00:42:22] Speaker 00:
Sometimes it works, sometimes it doesn't.

[00:42:25] Speaker 00:
But part of the reason that Congress did the system that the way they did, I think, was that the government had to get SAVE into a situation where it was effective, to use your words,

[00:42:40] Speaker 00:
and accurate enough to impose it and we just haven't gotten to there.

[00:42:48] Speaker 01:
That raises a point for me though.

[00:42:51] Speaker 01:
The states do use some sort of verification system, right?

[00:42:54] Speaker 01:
Is it an equivalent to SAVE?

[00:42:56] Speaker 00:
In the local government's view, it is within the construct of what is permitted to be done under the regulation.

[00:43:07] Speaker 01:
This gets to the problem of irreparable harm.

[00:43:11] Speaker 01:
How is there any irreparable harm if the programs are using some sort of verification system?

[00:43:17] Speaker 01:
And this says you have to use SAVE or an equivalent.

[00:43:19] Speaker 01:
It sounds like you're doing that anyway.

[00:43:20] Speaker 01:
This is saying you have to use SAVE.

[00:43:22] Speaker 01:
No, it says SAVE or an equivalent verification system.

[00:43:25] Speaker 00:
Well, I think my understanding is that the government is going to say that these exist.

[00:43:32] Speaker 00:
Again, we've got to step back.

[00:43:33] Speaker 00:
Why are these conditions being added?

[00:43:35] Speaker 00:
if everything is operating consistently.

[00:43:37] Speaker 00:
It's a verification system.

[00:43:39] Speaker 00:
Well, if the existing verification system is working, they're trying to do something new here is the point.

[00:43:44] Speaker 00:
But my point is irreparable harm.

[00:43:46] Speaker 00:
If you're already doing it, what's the harm?

[00:43:49] Speaker 00:
Well, if we can do it the way we've been doing it, then there is no irreparable harm.

[00:43:52] Speaker 00:
If we have to go through a process.

[00:43:54] Speaker 05:
So what you would like, though, is to not be mandated to use SAVE.

[00:43:59] Speaker 05:
Exactly.

[00:43:59] Speaker 05:
And if you're using the provisions that were

[00:44:04] Speaker 05:
under interim regulations, you would deem that an equivalent.

[00:44:09] Speaker 05:
And then you might be in a cat fight over whether it's equivalent or not.

[00:44:12] Speaker 05:
But as long as it's not mandated, that's your objective.

[00:44:17] Speaker 05:
Is that right?

[00:44:17] Speaker 05:
That is correct, Your Honor.

[00:44:19] Speaker 01:
But I just don't see what the reputable harm is.

[00:44:21] Speaker 01:
This is on a stay.

[00:44:24] Speaker 01:
If you're doing it anyway, and all it does is saying you have to do what you're doing, I just don't see the harm.

[00:44:29] Speaker 00:
Well, mandating something

[00:44:32] Speaker 00:
that Congress is specifically not authorized, which is the case here, is a violation of the separation of powers and a violation of exceeding statute of authority.

[00:44:44] Speaker 00:
It is.

[00:44:45] Speaker 00:
As this Court has recognized, if you have a constitutional violation that you're being asked to do, then that's irreparable harm.

[00:44:53] Speaker 00:
Plus, in the American Trucking Association case, we have a very similar situation as to here in terms of

[00:44:59] Speaker 00:
You have an unconstitutional, what has been found more likely than not to be unconstitutional conditions, and you're under threat of being subject to fines, penalties, and lawsuits.

[00:45:11] Speaker 00:
In that case, it was by states in case of unlawful preemption, but it's that Hobson's choice that the local governments are facing that they have to sign this, sign accepting the mandatory, sign accepting gender ideology, or be subject to action by the federal government.

[00:45:31] Speaker 00:
That's a Hobson's choice, which has also been held by this court in American Trucking Association as an irreparable injury.

[00:45:38] Speaker 01:
I have a similar question with the abortion funding.

[00:45:39] Speaker 01:
How much, Dean, do you know how much money the fund, the programs use to promote elective abortions?

[00:45:47] Speaker 00:
I don't even know what promote elective abortions means, which is part of the problem, is that these are vague terms and nobody knows what that means.

[00:45:55] Speaker 00:
So, you know, it's not just my vision of it and I think what our client's vision of it is, look, if somebody comes to us and needs shelter, their homelessness because they've been kicked out of their house by their husband because they're seeking an elective abortion, can we provide the housing for that person?

[00:46:12] Speaker 00:
Can we get that person, you know, getting the medical services that she is asked for and needs?

[00:46:19] Speaker 00:
And she will still be homeless after that because she's been kicked out of the house.

[00:46:22] Speaker 00:
So I don't know what promoting means.

[00:46:24] Speaker 01:
That's closer to enforcement, though, not necessarily the front end.

[00:46:28] Speaker 00:
I'm just getting to the reputable harm factor.

[00:46:30] Speaker 00:
Again, I think you have to distinguish these conditions are trying to do something new.

[00:46:35] Speaker 00:
They're not trying to just keep the status quo in place.

[00:46:39] Speaker 00:
If you're violating Title VI, Title VI has a way to have that enforced.

[00:46:43] Speaker 00:
If you are not using funds for program purposes, the federal government – and I forget which statute – but there's a statute that says what the federal government can do in that circumstance.

[00:46:55] Speaker 00:
So this, I believe, clearly is trying to do something more than existing.

[00:46:59] Speaker 00:
It's trying to implement Trump's policies.

[00:47:02] Speaker 00:
And I see I'm at the end of my time, so I would ask respectfully, unless there are further questions that you affirm the district court.

[00:47:09] Speaker 05:
I just had one last question.

[00:47:12] Speaker 05:
So it would seem, of course, that the counties and the entities have no objection to complying with the Hyde Amendment.

[00:47:20] Speaker 05:
It's just some added gloss on that that's undefined that poses the problem.

[00:47:26] Speaker 00:
Is that right?

[00:47:27] Speaker 00:
That is absolutely correct, Your Honor.

[00:47:30] Speaker 00:
Promoting is not a term used in the Hyde Amendment.

[00:47:34] Speaker 02:
What's the status of the case in the district court?

[00:47:39] Speaker 00:
There have been some subsequent actions where additional local governments have come on board and there's been some expansion of the injunctions, but the basic issues haven't otherwise advanced awaiting this court's decision.

[00:47:55] Speaker 00:
Okay, thank you.

[00:47:56] Speaker 00:
Thank you, counsel.

[00:48:07] Speaker 04:
Thank you, Your Honours.

[00:48:09] Speaker 04:
I'll start with materiality because I didn't address that in the opening and counsel focused on it.

[00:48:14] Speaker 04:
You know, the materiality provision as I see it is the government telling the grantees, you're on notice, we care about this.

[00:48:21] Speaker 04:
It's hard for me to see how that is something the agencies don't have the power to do.

[00:48:25] Speaker 04:
It is not dispositive.

[00:48:27] Speaker 04:
No, you know, courts do not treat that as dispositive in a false claims act case, but it is relevant.

[00:48:32] Speaker 04:
but we don't want is for in the event that there is some false claims that case.

[00:48:36] Speaker 02:
Somebody agreed to material reality at the outset it would be tough for them to backtrack.

[00:48:41] Speaker 04:
I think there are a lot of cases where courts say well yeah you signed this it says material but here's this other evidence cutting the other way we're not treating it as controlling but it does provide something for us to push back if

[00:48:54] Speaker 04:
In the event of a case down the road, the local government says, oh, well, everyone was doing this DEI stuff.

[00:49:00] Speaker 04:
We thought you were fine with it.

[00:49:02] Speaker 04:
Well, no, we actually called it out, and we said we cared about it, and we said it was material.

[00:49:06] Speaker 05:
But it's an additional condition, isn't it?

[00:49:09] Speaker 04:
It's sort of a condition in that it's in the document and it's saying to the grantees, we're telling you, and you're on notice, that this is material to our decision to pay these funds.

[00:49:22] Speaker 04:
And so that limits their ability later.

[00:49:24] Speaker 05:
Well, you have that enforcement ability.

[00:49:27] Speaker 05:
I mean, what you're trying to do is ratchet them into an acknowledgment up front, I guess.

[00:49:34] Speaker 04:
It's certainly designed to facilitate potential False Claims Act enforcement.

[00:49:39] Speaker 04:
If it turns out, I'm not hiding that, if it turns out that somebody was certifying knowingly that false certification that was made knowingly that they were engaged in a program that does discriminate and they're certifying otherwise, yes, we care about that and we're telling you up front.

[00:49:58] Speaker 05:
But without the certification, you still have that

[00:50:02] Speaker 05:
claim, right?

[00:50:03] Speaker 04:
That's right, yes, that's right.

[00:50:04] Speaker 05:
So I did have a question though, I wanted to clarify, this has to do with the verification.

[00:50:10] Speaker 05:
So as I heard you say, you don't have to use save, we offer it up, it's now free, somehow changed in the course of litigation, or it's equivalent.

[00:50:21] Speaker 05:
So is what is being done now on the interim rule, is that an equivalent?

[00:50:31] Speaker 04:
Right.

[00:50:31] Speaker 04:
So the condition says, must you save or an equivalent verification system approved by the federal government?

[00:50:38] Speaker 04:
So I guess what they're saying now is that what they're doing consistent with the IFR counts as an equivalent verification system approved by the federal government.

[00:50:49] Speaker 04:
It's hard for me to weigh in on that because I don't have any idea what they're doing and that's not in the record.

[00:50:54] Speaker 04:
So it may well be that it is.

[00:50:57] Speaker 05:
The problem is you're trying to impose this condition in effect

[00:51:01] Speaker 05:
And if they're doing whatever they're doing, but they decide to use SAVE, there's no prohibition against that.

[00:51:12] Speaker 05:
But what you're doing is saying you have to use SAVE or an equivalent, but we're not going to tell you if what you're doing under the current law is the equivalent.

[00:51:22] Speaker 05:
I just don't understand how you can put the

[00:51:26] Speaker 05:
entities in that position if you won't take a position.

[00:51:29] Speaker 04:
Yeah.

[00:51:30] Speaker 04:
Well, I don't think it's been put to us.

[00:51:32] Speaker 04:
So again, this is all, again, part of the problem is this is all coming up without any actual back and forth or attempts to enforce where we would say, oh, they took this position.

[00:51:41] Speaker 04:
We took that position.

[00:51:42] Speaker 04:
So it's hard for me to weigh in.

[00:51:43] Speaker 04:
I do think we could actually require save and only save because even if Perora only said the certain aliens are ineligible for public benefits, period,

[00:51:55] Speaker 04:
The Secretary could then say, we want to make sure you are actually abiding by that.

[00:52:01] Speaker 04:
Here is a prophylactic measure to ensure that money isn't going to ineligible people.

[00:52:06] Speaker 04:
SAVE does it.

[00:52:07] Speaker 04:
We want you to use SAVE.

[00:52:08] Speaker 04:
I think it is perfectly within the Secretary's authority to require SAVE alone.

[00:52:12] Speaker 04:
That's not what they've done.

[00:52:14] Speaker 04:
They've said, you know, we're opening the door to an equivalent that's approved by the federal government.

[00:52:19] Speaker 04:
And I understand that may not be fully fleshed out between the parties as to what that covers.

[00:52:23] Speaker 04:
I think from the perspective of statutory authority, which is the claim that's been made here, the statute entitles the secretary to take steps to ensure that this is being followed.

[00:52:41] Speaker 01:
Back to the False Claims Act, it does seem that this certification, for lack of a better word, lowers the threshold for approving a False Claims Act, which to me does seem to be ratching up the penalties under Title VI.

[00:52:57] Speaker 01:
So that might be, you could construe that as going beyond Title VI.

[00:53:01] Speaker 04:
So the way I am thinking about it is Title VI in not the 2000D, but the next subsection, the 2000D-1 that says,

[00:53:09] Speaker 04:
agencies are authorized and directed to effectuate the prohibition.

[00:53:15] Speaker 04:
I think this is a way of effectuating the prohibition, because the prohibition is don't discriminate.

[00:53:20] Speaker 04:
This is effectuating it by saying, if you do discriminate, we're going to have this additional tool to enforce against you.

[00:53:27] Speaker 04:
That's the way I think about it.

[00:53:28] Speaker 01:
OK.

[00:53:28] Speaker 01:
And even under your argument now, it is overbroad because I think it says any program, not just the Title VI programs.

[00:53:35] Speaker 04:
Programs that receive federal financial assistance.

[00:53:37] Speaker 01:
So you'd still need to be narrowed.

[00:53:40] Speaker 04:
OK.

[00:53:41] Speaker 04:
Thank you.

[00:53:41] Speaker 04:
If there are no further questions, thank you, Your Honor.

[00:53:43] Speaker 01:
Thank you, counsel.

[00:53:44] Speaker 01:
This case is submitted, and we are adjourned for today.

[00:53:57] Speaker 03:
The United States Court of Appeals for the Ninth Circuit will now depart for this court for this session.