XIRUM v. U.S. IMMIGRATION AND CUSTOMS ENFORCEMENT (ICE)

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF INDIANA

INDIANAPOLIS DIVISION

MARIBEL XIRUM, )

JAVIER JAIMES JAIMES, )

BAIJEBO TOE, )

)

Plaintiffs, )

)

v. ) Case No. 1:22-cv-00801-TWP-KMB

)

U.S. IMMIGRATION AND CUSTOMS )

ENFORCEMENT (ICE), )

U.S. DEPARTMENT OF HOMELAND )

SECURITY (DHS), )

ALEJANDRO MAYORKAS under the title of )

Secretary of DHS, )

TAE JOHNSON under the title of Acting Director )

of ICE, )

MONICA S. BURKE under the title of ICE Acting )

Assistant Director of Custody Management, )

RICARDO A. WONG under the title of ICE )

Deputy Assistant Director, Oversight Compliance )

and Acquisition Division, )

TRAVIS GRAHAM under the title of ICE Officer, )

ANGELINA RAMOS under the title of ICE )

Officer, )

VIRGINIA SUTTER under the title of ICE Officer, )

CLAY COUNTY, INDIANA, )

CLAY COUNTY COUNCIL, )

JACKIE MITCHELL under the title of Clay County )

Council Member, )

JASON BRITTON under the title of Clay County )

Council Member, )

JASON THOMAS under the title of Clay County )

Council Member, )

LARRY J. MOSS under the title of Clay County )

Council Member, )

JOHN NICOSON under the title of Clay County )

Council Member, )

DAVID AMERMAN under the title of Clay County )

Council Member, )

PATRICIA HEFFNER under the title of Clay )

County Council Member, )

BRYAN ALLENDER under the title of Clay )

County Commissioner, )

MARTY HEFFNER under the title of Clay County )

Commissioner, )

PAUL SINDERS under the title of President of the )

Clay County Board of Commissioner, )

ELIZABETH HUGHETT under the title of Clay )

County Sergeants and ICE Contract Coordinator, )

DAVID PARKER under the title of Clay County )

Sergeants and ICE Contract Coordinator, )

JASE GLASSBURN under the title of Clay County )

Sergeants and ICE Contract Coordinator, )

JENNIFER M. FLATNER[1] under the title of Clay )

County Auditor, )

CLAY COUNTY BOARD OF )

COMMISSIONERS, )

CLAY COUNTY JAIL, )

BRISON SWEARINGEN )

PATTI FOXX, )

MIKE MELENDEZ )

)

Defendants. )

ORDER ON FEDERAL DEFENDANTS'2 MOTION TO DISMISS IN PART

This matter is before the Court on a second Motion to Dismiss filed pursuant to Federal

Rule of Civil Procedure 12(b)(6) by Defendant U.S. Immigration and Customs Enforcement

("ICE") and the nine other federal government defendants (the "Federal Defendants") (Filing No.

152). The twenty-one defendants who work for or otherwise represent Clay County, Indiana

("Clay County") (the "Clay County Defendants") bring a separate second Motion to Dismiss

1 The Civil Cover Sheet filed with the Court indicates the name of this defendant as "Jennifer M. Flater" (Filing No.

1-3 at 3), which is consistent with the party alleged in the operative Amended Complaint (see Filing No. 129 at 2), on

whose behalf counsel has entered an appearance (see, Filing No. 36 at 1). The Clerk is hereby directed to update the

parties' information in CM/ECF to correctly reflect the defendant's name.

2 This term encompasses Defendants U.S. Immigration and Customs Enforcement (ICE); U.S. Department of

Homeland Security (DHS); Alejandro Mayorkas, in his official capacity as Secretary of DHS; Tae Johnson, in his

official capacity as Acting Director of ICE; Ricardo A. Wong, in his official capacity as ICE Deputy Assistant

Director, Oversight Compliance and Acquisition Division; Monica S. Burke, in her official capacity as ICE Acting

Assistant Director of Custody Management; Mike Melendez, in his official capacity as Acting Field Office Director

of the ICE Chicago Field Office; Travis Graham, in his official capacity as an ICE Officer; Angelina Ramos, in her

official capacity as an ICE Officer; and Virginia Sutter, in her official capacity as an ICE Officer.

(Filing No. 150), which this Court will rule on in a separate order. (Federal Defendants and Clay

County Defendants together are referred to as "Defendants".)

Plaintiffs Maribel Xirum, Javier Jaimes Jaimes, and Baijebo Toe (collectively, "Plaintiffs")

are non-citizens who are or were detained at the Clay County Jail in Brazil, Indiana (the "Jail")

pursuant to an Intergovernmental Service Agreement (the "Agreement") between ICE and Clay

County. Plaintiffs initiated this action originally challenging ICE's certification of the Jail as

compliant with the Performance-Based National Detention Standards ("PBNDS"), ICE's authority

to continue paying federal funds to Clay County for the detention of non-citizens, and Clay

County's discretion to use the federal funds for purposes other than the care and safekeeping of

non-citizens. Plaintiffs filed a Class Action Complaint seeking a variety of declaratory and

injunctive relief that all served to stop ICE from continuing to house detainees at the Jail and to

prevent ICE from paying any more federal detention funds to Clay County.

Defendants' first motions to dismiss (Filing No. 56; Filing No. 60) were partially

successful; the Court dismissed with prejudice certain portions of Count I and dismissed without

prejudice other portions of the count, as well as dismissed without prejudice Counts II and III (see

Filing No. 116). Plaintiffs filed an Amended Complaint (Filing No. 129), pleading again the claim

challenging ICE's certification of the Jail as PBNDS compliant and adding five claims challenging:

(a) ICE's abdication of enforcement authority pursuant to a federal appropriations provision (Count

II), (b) ICE's unlawful payments of federal funds in violation of both federal immigration law and

administrative regulation (Count III), (c) ICE's decision to abdicate enforcement responsibility

pursuant to regulatory authority (Count IV), (d) Clay County's violations of state law and jail

policy (Count V), and (e) Clay County's violations of federal law governing the detention payments

(Count VI). As before, Plaintiffs seek a variety of declaratory and injunctive relief.

The Federal Defendants' second Motion to Dismiss followed and is now ripe before the

Court. For the following reasons, the Court grants in part and denies in part the Federal

Defendants' Motion to Dismiss.

I. BACKGROUND

The following facts are not necessarily objectively true, but, as required when reviewing a

motion to dismiss, the Court accepts as true all factual allegations in the Amended Complaint and

draws all inferences in favor of Plaintiffs as the non-moving party. See Bielanski v. County of

Kane, 550 F.3d 632, 633 (7th Cir. 2008).

Since the facts alleged in the 89-page Amended Complaint contain many of same facts

alleged in the original complaint, the Court refers the parties to the Court's Order on Defendants'

First Motions to Dismiss for a more comprehensive factual background (see Filing No. 116 at 3–

12). The Court's recitation below assumes familiarity with the Court's Order and contains mostly

additional novel facts relevant to Counts II, III, and IV as alleged in Plaintiffs' Amended

Complaint.

A. The Agreement

In 2013, ICE issued an addendum to the Agreement, originally entered into in 2006, to start

sending non-citizens to the Jail, and Clay County began detaining people in immigration custody

at the Jail. (Filing No. 129 at 21 ¶¶ 61, 63.) The Agreement incorporates laws and regulations

limiting the purpose for which ICE may enter into detention contracts and limiting the use of

federal funds paid pursuant to those contracts. The incorporated laws and regulations at issue here

are the Immigration and Nationality Act, 8 U.S.C. §§ 1101–1557, the Uniform Administrative

Requirements, Cost Principles, and Uniform Audit Requirements for Federal Awards, 2 C.F.R.,

Part 200 ("UAR"),3 ICE's PBNDS; and the "Two Strikes Mandate".

1. The Immigration and Nationality Act ("INA")

While the INA permits ICE to enter into detention contracts with non-federal entities and

to make payments under those contracts, it restricts both the purpose of the detention contracts and

the use of federal funds paid under the contracts. Specifically, ICE may only enter into detention

contracts "for the necessary construction, physical renovation, acquisition of equipment, supplies

or materials required to establish acceptable conditions of confinement and detention services." 8

U.S.C. § 1103(a)(11)(B). And ICE may only "make payments" from federal funds allocated to

ICE "for necessary clothing, medical care, necessary guard hire, and the housing, care, and security

of persons detained" under one of ICE's detention contracts. Id. at § 1103(a)(11)(A).

2. The UAR

As described by Plaintiffs, the UAR "sets forth mandatory cost-allowance, accounting, and

auditing requirements for federal and state agencies with respect to entering and maintaining

agreements" (Filing No. 129 at ¶ 64). Adopted in 2016, the UAR in part prohibits recipients from

"earn[ing] or keep[ing] any profit resulting from Federal financial assistance, unless explicitly

authorized by the terms and conditions of the Federal award." Id. ¶¶ 66 (quoting 2 C.F.R. §

200.400(g)), 64. To ensure compliance with provisions like Section 200.400(g), awarding

agencies are required to, among other things, "[e]nsure that audits are completed and reports are

received in a timely manner" and "ensure that the recipient takes appropriate and timely corrective

action" when necessary. Id. ¶ 67 (quoting 2 C.F.R. § 200.513(c)).

3 The Agreement incorporates 28 C.F.R. Part 66, which has since been superseded by the UAR.

The UAR requires federal agencies paying federal funds to non-federal entities to "manage

and administer the Federal award in a manner so as to ensure that Federal funding is expended and

associated programs are implemented in full accordance with the U.S. Constitution, Federal Law,

and public policy requirements." 2 C.F.R. § 200.300(a). It defines "[i]mproper payment" to mean

"[a]ny payment that should not have been made or that was made in an incorrect amount under

statutory, contractual, administrative, or other legally applicable requirements" and indicates that

"payment" in this definition means "any disbursement or transfer of Federal funds (including a

commitment for future payment . . .) to any non-Federal person, non-Federal entity . . . that is made

by a Federal agency . . . administering a Federal program or activity." 2 C.F.R. § 200.1.

The UAR also requires federal funding recipients to "[e]stablish and maintain effective

internal control over the Federal award that provides reasonable assurance that the non-Federal

entity is managing the Federal award in compliance with Federal statutes, regulations, and the

terms and conditions of the Federal award." Id. § 200.303(a).

3. The Two Strikes Mandate

As part of a consolidated appropriations act, Congress restricted ICE's expenditure of

federal detention funds to ensure that contracted facilities comply with the PBNDS. See Pub. L.

No. 110-329, Div. D, Tit. II (Sep. 30, 2008), 122 Stat. 3574. Congress provided that no federal

detention funds "may be used to continue any contract for the provision of detention services if the

two most recent overall performance evaluations received by the contracted facility are less than

'adequate' or the equivalent median score in any subsequent performance evaluation system." Id.

(emphasis added). The parties call this restriction the "Two Strikes Mandate."

B. Clay County's Misuse of Federal Detention Funds

Plaintiffs allege that, for years, Clay County has used the Agreement as a "cash cow" at the

expense of federal detainees (Filing No. 129 ¶ 5). Clay County is alleged to have taken federal

funds meant for detainees' benefit and used those funds for unrelated, discretionary expenditures.

Id. ¶ 83. For example, in 2020, Clay County received roughly $1.4 million from ICE and spent

more than half of that amount on County "budget items" including employee raises and bonuses.

Id. ¶ 84. Clay County "openly trumpets" that it profits from the Agreement and is able to "keep

down taxes" for residents by misusing federal detention funds. Id. ¶¶ 86–90, 100.

C. The Jail Conditions

As a result of Clay County's diversion of federal detention funds, the conditions in the Jail

grossly violate the PBNDS and the Jail's own policy for non-citizens ICE detainees, which are

described in the Clay County Jail ICE Handbook. Id. ¶ 108. The Plaintiffs' Amended Complaint

alleges the violations in detail, see generally id. ¶¶ 108–89, and the Court's order on Defendants'

first motions to dismiss recites them in brief (see Filing No. 116 at 7–9).

D. ICE's Performance Evaluations of the Jail

While ICE "maintains the largest civil detention system in the United States, the agency

does not own or operate most of the facilities it uses" (Filing No. 129 ¶ 192). Recently, several

facilities in the Midwest have stopped working with ICE, making ICE increasingly reliant on

cooperating facilities "to accommodate ICE's ever-increasing detention efforts." Id. at ¶¶ 194–97.

To avoid losing access to remaining facilities under the Two Strikes Mandate, ICE works

to ensure those facilities do not fail two consecutive overall performance evaluations. Plaintiffs

claim ICE has "consciously and expressly ignored the appalling and grossly inadequate conditions

at the Jail," choosing to suspend all enforcement of the Two Strikes Mandate and doing "whatever

it takes to ensure that the Jail is not certified as violating the PBNDS in two consecutive overall

performance evaluations . . . ." Id. ¶ 190. It also has ignored Clay County's violations of federal

laws, "expressly taken the position that 2 C.F.R. Part 200 does not apply to detention agreements

like the Agreement at all," and has abdicated enforcement of the UAR's requirements against Clay

County. Id. ¶ 191. The reason ICE has chosen to abdicate all authority to enforce the laws is

because, as previously stated, it "depends on access to the Jail to support [its] massive detention

efforts." Id. ¶ 192.

Since 2007, ICE has used a private company called The Nakamoto Group, Inc.

("Nakamoto") to inspect detention facilities and ensure their compliance with the PBNDS. Id.

¶¶ 13, 200. Inspection reports generated by Nakamoto are submitted to ICE for final approval. Id.

¶ 209. Plaintiffs describe Nakamoto's inspections as "deeply flawed." Id. ¶ 200. Nakamoto's

inspectors "breeze by the [PBNDS] standards" and do not check if the facilities are actually

implementing required policies. Id. ¶ 201.

Plaintiffs allege ICE has been aware of the deficiencies in Nakamoto's inspections.

Nevertheless, "ICE continued to rely on Nakamoto to conduct its overall performance evaluations

. . . ." Id. ¶ 211. The OPR only conducts remote, "ad hoc inspections of a handful of facilities

each year through its Office of Detention Oversight ('ODO'), evaluating compliance with only a

subset of requirements of the PBNDS." Id. Plaintiffs' claims challenge Nakamoto's May and

December 2021 inspections and ICE's overall performance evaluations.

1. May 2021 Inspection and Evaluation

Conditions at the Jail have warranted a failing grade for years. Id. ¶ 281. A number of the

deficiencies documented in the May 2021 overall performance evaluation, which resulted in a

failing grade, reflect structural defects in the Jail. Id. For example, the Jail is configured so that

there are not enough toilets and sinks in the housing units for non-citizens detained by ICE. Id.

Plaintiffs allege that, with these structural defects, the Jail should not have been able to pass a valid

overall performance evaluation. Id. Other deficiencies documented in the May 2021 overall

performance evaluation have persisted for years due to Clay County's neglect. Id. ¶ 282.

Despite consistently substandard conditions at the Jail, ICE has never given the Jail a

failing grade on two consecutive overall performance evaluations because, as Plaintiffs claim, ICE

officials "abdicated their responsibility to terminate detention" at the Jail. Id. ¶¶ 283, 284. ICE's

decision is part of a broader pattern of abdication of enforcement responsibility for more than a

decade. Id. ¶ 290. To Plaintiffs' knowledge, ICE has "never applied the Two Strikes Mandate to

terminate any contract for detention since at least 2009"; instead, ICE "demonstrate[s] a pattern of

finding ways to manipulate the inspection process to avoid documenting consecutive failures." Id.

(emphasis in original).

2. Actions Preceding the December 2021 Inspection and Evaluation

To avoid the possibility of the Jail failing its next overall performance evaluation, "ICE

and the County immediately began working to ensure that no subsequent failure was ever

documented." Id. ¶ 221. "Following the May 2021 overall performance evaluation, ICE officials

made up their minds that the Jail was going to receive a passing grade on the critical December

2021 evaluation regardless of whether conditions at the Jail warranted a second consecutive failing

grade." Id. ¶ 284. As a result, ICE disregarded, and in effect suspended, the restrictions and

requirements of the Two Strikes Mandate for detention at the Jail. Id. ¶ 285.

The "decision to abdicate enforcement authority" was reflected in several actions. Id. ¶

286. "An internal ICE email from October 26, 2021, more than a month before the inspection,

showed that ICE officials had already made up their minds that the Jail 'passed after [] 180 [day]

re-inspection' so that ICE would not have to terminate detention at the Jail under the Two Strikes

Mandate." Id. ¶ 235 (citing Filing No. 101-20); see id. ¶ 286. Additionally, "[i]n the same memo

recognizing that a failing grade would require termination of detention at the Jail, ICE's Assistant

Director specifically stated: 'Please ensure the CLAY COUNTY JAIL Sheriff is notified of the

upcoming inspections (specific dates still to be determined).'" Id. ¶ 287 (emphasis in original).

ICE rescheduled the December 2021 evaluation at the request of Jail officials, giving them even

more time to temporarily modify practices to pass the inspection. Id. ¶ 288. ICE "inexplicably

certified a passing grade" despite Nakamoto's inspection report in December 2021 that concluded,

"[s]anitation levels and conditions of confinement were observed to be unacceptable in housing

units dedicated to ICE detainees." Id. ¶ 289.

The December 2021 inspection identified twenty-one deficient components across eight

detention standards, including unacceptable sanitation levels, inadequate seating for meals, the use

of "boat beds,"4 the presence of graffiti, a lack of privacy panels in toilet areas, and malfunctioning

toilets. Id. ¶¶ 238–40. Nevertheless, Nakamoto recommended the Jail receive a "Meets Standard"

rating for Environmental Health and Safety standards and Personal Hygiene standards. Id. ¶¶ 241–

43. "ICE rubber-stamped Nakamoto's recommendation without any meaningful review or analysis

of the December 2021 inspection report." Id. ¶ 252. As a result, ICE was not forced to terminate

the Agreement, and "non-citizens like Plaintiffs continue to be held at the Jail in grossly inadequate

conditions." Id. at ¶ 20.

E. ICE's Continuation of Payments and Abdication of Enforcement

In spite of the aforementioned misuse of funds and grossly inadequate conditions, ICE

makes payments to maintain access to the Jail "no matter the actual costs of detention at the Jail,

regardless of the conditions at the Jail, and despite the County's improper uses of the funds." Id. ¶

4 "Boat beds" are thin, plastic tub-shaped pallets placed on the floor and intended for use as temporary sleeping

arrangements (Filing No. 129 ¶ 18 n.3).

306. Plaintiffs maintain these payments from congressionally appropriated funds violate federal

law. See id. ¶¶ 6, 7.

More broadly, ICE knows Clay County misappropriates detention payments. Id. ¶ 6. ICE

further consciously and expressly ignores the appalling and grossly inadequate conditions at the

Jail. Id. ¶ 190. Plaintiffs allege ICE continues making payments anyway to ensure Clay County

continues to cooperate and allow ICE to detain non-citizens by making the Jail available, as ICE

has become increasingly dependent on the Jail in the Chicago Area of Responsibility after other

facilities closed their doors to ICE detention. Id. ¶¶ 6, 303–04. In support, Plaintiffs point to an

April 2021 incident wherein the ICE Facility Compliance Officer assigned to the Jail "lamented to

then-Clay County Sheriff Harden that ICE had already lost the use of three other Indiana facilities"

and "specifically told Harden that ICE was looking for the County to expand its capacity to

accommodate ICE's ever-increasing detention efforts." Id. ¶ 196; see id. ¶ 305.

Correspondingly, Plaintiffs allege that ICE has consciously and expressly adopted a policy

of non-enforcement for violations of federal laws governing the permissible uses of federal funds

by non-Federal entities, suspending enforcement of those laws wholesale. Id. ¶ 7. They contend

ICE has abdicated all enforcement of the UAR’s requirements in expressly taking the position that

2 C.F.R. Part 200 does not apply to detention agreements like the Agreement at all. Id. ¶ 191.

Because of ICE's continued payments and abdications of enforcement authority, "non-citizens

continue to be held at the Jail in grossly inadequate conditions." Id. ¶ 22.

II. LEGAL STANDARD

A motion to dismiss under Rule 12(b)(6) allows a defendant to move to dismiss a complaint

that has failed to "state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). When

deciding a motion to dismiss under Rule 12(b)(6), the court accepts as true all factual allegations

in the complaint and draws all inferences in favor of the plaintiff. Bielanski, 550 F.3d at 633.

However, courts "are not obliged to accept as true legal conclusions or unsupported conclusions

of fact." Hickey v. O'Bannon, 287 F.3d 656, 658 (7th Cir. 2002).

The complaint must contain a "short and plain statement of the claim showing that the

pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). In Bell Atlantic Corp. v. Twombly, the United

States Supreme Court explained that the complaint must allege facts that are "enough to raise a

right to relief above the speculative level." 550 U.S. 544, 555 (2007). Although "detailed factual

allegations" are not required, mere "labels," "conclusions," or "formulaic recitation[s] of the

elements of a cause of action" are insufficient. Id.; see also Bissessur v. Indiana Univ. Bd. of Trs.,

581 F.3d 599, 603 (7thCir. 2009) ("[I]t is not enough to give a threadbare recitation of the elements

of a claim without factual support"). The allegations must "give the defendant fair notice of what

the . . . claim is and the grounds upon which it rests." Twombly, 550 U.S. at 555. Stated differently,

the complaint must include "enough facts to state a claim to relief that is plausible on its face."

Hecker v. Deere & Co., 556 F.3d 575, 580 (7th Cir. 2009) (citation and quotation marks omitted).

To be facially plausible, the complaint must allow "the court to draw the reasonable inference that

the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)

(citing Twombly, 550 U.S. at 556).

In considering a 12(b)(6) motion, district courts may take judicial notice of matters of

public record without converting the motion into one for summary judgment. Henson v. CSC

Credit Servs., 29 F.3d 280, 284 (7th Cir. 1994); see also Fosnight v. Jones, 41 F.4th 916, 922,

2022 WL 2965668 (7th Cir. 2022); Martinez v. Universal Laminating, Ltd., 2002 WL 31557621,

at *1 (N.D. Ill. Nov. 18, 2002) (citing Henson, 29 F.3d at 284) ("Moreover, the court may take

judicial notice of matters of public record, including records of administrative bodies, without

converting a 12(b)(6) motion . . . ." (emphasis added)).

III. DISCUSSION

In addition to reasserting their claim against ICE for improper certification of the Jail as

PBNDS compliant, Plaintiffs add three additional claims. The Amended Complaint also asserts

two claims against Clay County under the Indiana Declaratory Judgment Act and Indiana Trial

Rule 57, which the Court will address by separate order.

Plaintiffs bring their claims against ICE pursuant to the Administrative Procedure Act, 5

U.S.C. § 706(2) (the "APA"). The APA governs judicial review of agency actions and waives

federal sovereign immunity in some circumstances to allow for equitable relief from agency action

or inaction. See 5 U.S.C. § 702. Section 701(a)(2) of the APA precludes judicial review of agency

actions "committed to agency discretion by law." 5 U.S.C. § 701(a)(2). Under the APA, a court

may "hold unlawful and set aside agency action" that is found to be "arbitrary, capricious, an abuse

of discretion," "short of statutory right," or "without observance of procedure required by law."

Id. § 706(2)(A), (C)–(D). ICE moves to dismiss three of the four claims.

A. Counts II and IV – ICE's Abdication of Enforcement Authority

Count II challenges ICE's abdication of "responsibility to terminate detention" at the Jail

"under the Two Strikes Mandate" when it "disregarded, and in effect suspended" the Mandate's

"restrictions and requirements" (Filing No. 129 ¶¶ 284, 285). Count IV challenges another

abdication of enforcement responsibility and claims ICE, "[i]n effect, . . . revoked the restrictions

and requirements of the UAR in connection with detention at the Jail." Id. ¶ 313; see id. ¶ 314.

Plaintiffs maintain in both counts that abdicating the enforcement authority, or the decision to do

so, was arbitrary, capricious, and an abuse of discretion. See id. ¶¶ 279–93, 312–24.

ICE argues Counts II and IV are barred from APA review and fails to adequately allege

discrete and final agency action (see Filing No. 153 at 11). Ultimately, with regard to Count II,

the Court agrees with ICE that Plaintiffs fatally do "not demonstrate any violation" of a statute

restricting the agency's enforcement discretion. Id. at 14. Concerning Count IV, however, the

Plaintiffs allege an "extreme" policy of "abdication" that meets the potential exception to the

general rule of non-reviewability under section 701(a)(2). Id. at 17.

1. Discretionary Enforcement Decisions under section 701(a)(2)

"The APA establishes a 'basic presumption of judicial review [for] one' "suffering legal

wrong because of agency action."'" Department of Homeland Sec. v. Regents of the Univ. of Cal.,

140 S. Ct. 1891, 1905 (2020) [hereinafter Regents] (quoting Abbott Lab'ys v. Gardner, 387 U.S.

136, 140 (1967) (quoting 5 U.S.C. § 702)) (alteration in original). "This presumption can be

rebutted by a showing that the relevant statute 'preclude[s]' review, § 701(a)(1), or that the 'agency

action is committed to agency discretion by law,' § 701(a)(2)." Id. ICE invokes the latter exception

here.

"To 'honor the [APA's] presumption of review,'" the Supreme Court has "'read the

exception in § 701(a)(2) quite narrowly,' confining it to those rare 'administrative decision[s]

traditionally left to agency discretion.'" Id. (internal citations omitted) (quoting Weyerhaeuser Co.

v. U.S. Fish & Wildlife Serv., 139 S. Ct. 361, 370 (2018) and Lincoln v. Vigil, 508 U.S. 182, 191

(1993)). Phrased differently, the exception to the presumption of review "applies 'in those rare

instances where statutes are drawn in such broad terms that in a given case there is no law to

apply.'" Head Start Family Educ. Program, Inc. v. Coop. Educ. Serv. Agency 11, 46 F.3d 629,

632 (7th Cir. 1995) (quoting Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 410

(1971)) (internal quotation marks omitted).

This limited category of unreviewable actions includes an agency's decision not to institute

enforcement proceedings. Regents, 140 S. Ct. at 1905 (citing Heckler v. Chaney, 470 U.S. 821,

831–32 (1985)). By and large, agency enforcement decisions are generally unsuitable for judicial

review because they "involve[] a complicated balancing of a number of factors which are

peculiarly within [the agency's] expertise," such as "whether the particular enforcement action

requested best fits the agency's overall policies" or "whether the agency has enough resources to

undertake the action at all." Heckler, 470 U.S. at 831.

2. Count II Alleges Enforcement Decisions Relegated to ICE's Discretion

ICE's contends that Heckler supports dismissal of Count II. In Heckler, several death-row

inmates petitioned the Food and Drug Administration for enforcement action against two States to

prevent their use of certain drugs for lethal injection. The Supreme Court held that section

701(a)(2) of the APA prevented review because there was "no meaningful standard against which

to judge the agency's exercise of discretion." Id. at 830; see also Vahora v. Holder, 626 F.3d 907,

917 (7th Cir. 2010) (commenting on Heckler). The decision against taking enforcement action

mirrors, "'to some extent,' a prosecutor's decision not to indict, which has 'long been regarded as

the special province of the Executive Branch.'" Regents, 140 S. Ct. at 1906 (quoting Heckler, 470

U.S. at 832). In this vein, ICE contends that the appropriations provision of the Two Strikes

Mandate "provides no relevant restrictions on ICE enforcement authority," but rather only "forbids

the agency from expending appropriated funds on facilities that fail two consecutive overall

performance evaluations," which has not occurred yet (Filing No. 153 at 14).

As a side note, the Court previously observed in its order on the original motion to dismiss

that ICE had not determined that the Jail had failed two consecutive evaluations (see Filing No.

116 at 21). The Amended Complaint likewise does not include any such averments. Although

ICE correctly notes the actual number of failures (one), see, e.g., Filing No. 101-23 at 2 (assigning

final rating of "Meets Standards" for December 9, 2021 annual review), the Court is not convinced

that this fact by itself is fatal to Count II. In fact, the entire theory behind this second claim, unlike

the claim found in Count I, rests on the very premise that the Jail has not, but should have, received

two consecutive failed performance evaluations — if only ICE officials had not "made up their

minds that the Jail was going to receive a passing grade on the critical December 2021 evaluation"

regardless of whether conditions actually warranted a second consecutive failing grade (Filing No.

129 ¶ 284).

ICE's point about the underlying statute (the Two Strikes Mandate) is well-taken in the

context of Heckler's presumption against judicial review. Plaintiffs counter that Count II properly

falls within a potential exception to the general rule of non-reviewability for agency enforcement

decisions — one which applies where "it could justifiably be found that the agency has

'consciously and expressly adopted a general policy' that is so extreme as to amount to an

abdication of its statutory responsibilities."5 Heckler, 470 U.S. at 833 n.4 (internal citation

omitted) (citing Adams v. Richardson, 480 F.2d 1159 (D.C. Cir. 1973) (en banc)); see id. at 839

(Brennan, J., concurring). In essence, Plaintiffs urge the Court to find ICE's alleged inaction in

"never giv[ing] the Jail a failing grade" on two consecutive evaluations (Filing No. 129 ¶ 282)

amounts to "an extreme abdication of . . . statutory responsibility mandated by Congress." (Filing

No. 168 at 36.)

Whether such an exception exists or applies in this instance is ultimately inconsequential,

however, without any meaningful statutory standard against which the Court can effectively judge

5 Plaintiffs allege as much in their Amended Complaint (see, e.g., Filing No. 129 ¶ 2), and they argue that ICE

"orchestrated an artificial inspection and certification regime that ensures that no facility, no matter how troubled, will

ever receive a second failing grade." (Filing No. 168 at 36.)

the agency's exercise of enforcement discretion over its own regulations. The Court cannot reach

what Plaintiffs wish it to decide without "law to apply". Head Start, 46 F.3d at 632.

Section 701(a)(2) "requires careful examination of the statute on which the claim of agency

illegality is based." Id. (quoting Webster v. Doe, 486 U.S. 592, 600 (1988)). A review of the

statute on which Plaintiffs base their claim of illegality, presumably the Two Strikes Mandate (see

Filing No. 129 ¶ 291), reveals from its broad terms a dearth of "law to apply" by this Court in its

review. Id. (quoting Overton Park, 401 U.S. at 410).

Originating within the Consolidated Security, Disaster Assistance, and Continuing

Appropriations Act, 2009, the Two Strikes Mandate restricted ICE's expenditure of federal

detention, providing that "none of the [federal detention funds] may be used to continue any

contract for the provision of detention services if the two most recent overall performance

evaluations received by the contracted facility are less than 'adequate' or the equivalent median

score in any subsequent performance evaluation system." Pub. L. No. 110-329, Div. D, Tit. II,

122 Stat. 3574 (Sep. 30, 2008). The appropriations act in effect during the relevant periods in

2021, the Consolidated Appropriations Act of 2021, contained the same language.6 See Pub. L.

No. 116-260, Div. F, Tit. II, § 215 (Dec. 27, 2020), 134 Stat. 1182, 1457; see also Filing No. 129

¶ 105 (collecting history of relevant appropriations acts).

"[N]one . . . may be used", the operative language taken to task in Count II, indicates a

nondiscretionary duty to refrain from using, or to cease the existing use of, federal funds for the

provision of detention services if and when the two most recent overall performance evaluations

6 The Consolidated Appropriations Act of 2021 additionally required the performance evaluations "be conducted by

[ICE's] Office of Professional Responsibility," Pub. L. No. 116-260, Div. F, Tit. II, § 215 (Dec. 27, 2020), 134 Stat.

1182, 1457, which the Amended Complaint addresses in Count I (see, e.g., Filing No. 129 at 265). In contrast, Count

II does not expressly address this requirement or allege a violation of it by ICE; rather, it only involves an abdication

of the "responsibility to terminate detention . . . ." Id. ¶ 284 (emphasis added).

are less than adequate. This standard, which restricts which contracts receive federal funding, is

separate and distinct from a standard by which to judge ICE's conduct in reaching the point

described in the restriction. The appropriations statute is otherwise silent as to how frequently

evaluations and inspections must be conducted or the criteria ICE should apply therein.

Consequently, in this case, the federal funding restriction is inadequate "law to apply" to help

discern guidelines to apply to ICE's enforcement decisions about monitoring and assigning failing

grades. See American Disabled for Attendant Programs Today v. U.S. Dep't of Housing & Urban

Dev., 170 F.3d 381, 385 (3d Cir. 1999) (affirming dismissal of challenge to agency's refusal to

investigate misallocation of federal funds as an unreviewable enforcement decision; "[Plaintiff]

confuses the existence of a standard restricting federal funding recipients with the existence of a

standard by which to judge HUD's conduct").

Importantly, Plaintiffs do not point to other authorities that they allege provide the Court

with sufficient indicia of an intent by Congress to circumscribe the enforcement discretion

challenged by Plaintiffs' claim. When it comes to Count II, the INA and UAR do not provide any

such meaningful standard either, for reasons similar to those discussed by the Court in finding they

did not provide standards to judge the enforcement discretion for alleged inaction described in

Count II of the original complaint (see Filing No. 116 at 27–28).

Plaintiffs ask this Court to review whether ICE has systematically botched assigning failing

grades in the face of noncompliance. The Court finds, from what Plaintiffs identify, that Congress

has provided no guidelines, or law to apply, to constrain ICE's enforcement or application of

overall performance evaluations. Therefore, without a meaningful standard to apply, the Court is

forced to conclude that the decisions are committed exclusively to agency discretion and the

presumption against non-reviewability is left unrebutted.7 See American Disabled for Attendant

Programs Today, 170 F.3d at 386.

For the reasons stated above, Plaintiffs' Count II must be dismissed. The Court need not

and will not address the parties' arguments as to whether ICE's alleged inaction constitutes final

agency actions. ICE's Motion to Dismiss is granted as to Count II.

3. Count IV Alleges Actions that fit into Heckler's Abdication Exception

Plaintiffs' Count IV takes off where the Court's order on the original complaint left off —

that is, it alleges "a complete abdication of ICE's responsibility to enforce applicable laws and

regulations" of the UAR (see Filing No. 116 at 45 (citing United States v. Simmons, 2022 WL

1302888, at *12 (D.D.C. May 2, 2022); Irish 4 Reprod. Health v. U.S. Dep't of Health & Human

Servs., 434 F. Supp. 3d 683, 697 (N.D. Ind. 2020)).

ICE contends that the abdication exception to section 701(a)(2) "requires more than []

inference — it requires an express policy of non-enforcement," which Plaintiffs do not allege

(Filing No. 153 at 16). Instead of pointing to a rule or publication "establishing any such policy,"

Plaintiffs allege "disparate actions and statements as inferentially supporting the existence of such

policies." Id.

Plaintiffs respond that ICE "expressly stated" it has never followed the UAR with respect

to any payments under detention agreements with local governments in a 2018 report by the Office

of Inspector General ("OIG") of the Department of Homeland Security ("DHS") (Filing No. 168

at 31 (citing Filing No. 129 ¶ 191)). The report serves, for Plaintiffs, as the adoption of a

"conscious and express policy" to ignore the diversion of funds unrelated to non-citizens' care and

7 Accordingly, the Court need not address Plaintiffs' argument that abdication can be inferred or their contention that

ample factual allegations support the inferred abdication.

custody and the maintenance of adequate conditions at the Jail that fits into Heckler's exception

(Filing No. 129 ¶ 313). Plaintiffs reason that, if such an abdication were deemed committed to

agency discretion by law, then entities like Clay County could violate, say, the prohibitions on

"earn[ing] or keep[ing] any profit" (Filing No. 168 at 34 (quoting 2 C.F.R. § 200.400(g)).

The Court finds that the report to which Plaintiffs point supports its position that ICE

undertook a general policy of non-enforcement regarding its UAR restrictions. Paragraph 313 of

the Amended Complaint points to comments made in January 2018 by then-Senior Official,

Thomas Homan ("Homan"), in response to a Draft Report completed by the DHS OIG (Filing No.

129 ¶ 313 (citing DHS Off. of Inspector Gen., Immigration and Customs Enforcement Did Not

Follow Federal Procurement Guidelines when Contracting for Detention Services, OIG-18-53 at

10–14 (Feb. 21, 2018) (hereinafter 2018 OIG Report), available at https://tinyurl.com/mrxhu4nj)).

The Court takes judicial notice that Homan therein asserts ICE's Intergovernmental Services

Agreement ("IGSA") authority stems from 8 U.S.C. § 1103(a)(11)(A) and its IGSAs "are not

generally required to follow the Federal Acquisition Regulation (FAR)."8 2018 OIG Report, OIG-

18-53 at 11. Homan further asserts that an IGSA is not a cooperative agreement, see 31 U.S.C. §

630, which is unlike a procurement contract, see 31 U.S.C. § 6303, which are "used when the

principal purpose is to obtain services or property, by purchase, lease or barter, for the direct

benefit or use of the United States." 2018 OIG Report, OIG-18-53 at 11.

The parties dispute the meaning of Homan's next statement:

Despite the OIG's conclusion ICE has never defined IGSAs nor followed the FAR

and or federal contracting guidelines contained in part 200 of Title 2 of the Code of

Federal Regulations, both ICE OAQ and the Office of the Principal Legal Advisor

8 Count IV does not challenge ICE's failure to follow FAR regulatory restrictions in its IGSAs.

(OPLA) have long taken the position that an IGSA is a type of procurement

[contract] rather than a cooperative agreement.[9]

Id.

Plaintiffs argue that Homan's statement "shows that ICE 'has consciously and expressly

adopted a general policy' of not enforcing the UAR with respect to [IGSAs] for detention services

— an explicit abdication of its legal responsibilities." (Filing No. 168 at 32.) ICE responds that

the memorandum, when properly interpreted, rejects Plaintiffs' assertions, and contains no general

policy to abdicate enforcement responsibilities.

The Court agrees with Plaintiffs' interpretation, which it finds to be plausible when

resolving interpretive inferences in their favor. When interpreted to mean, "the agency has long

taken the position that the UAR does not govern the IGSAs (like the Agreement) in the first

instance since it considers the agreements to be procurement contracts," then Homan's statement

supports Plaintiffs' position that ICE's express disregard of UAR requirements with respect to the

Agreement is contrary to law. The "[d]espite the . . . conclusion" language at the sentence's

beginning prefaces disagreement with a necessary supposition to the OIG's conclusion: that the

IGSAs were at the time cooperative agreements regulated by the UAR nearly in its entirety (see

generally Award Management Corrections, 80 Fed. Reg. 54407 (Sept. 10, 2015) (providing for an

applicability table, and codified at 2 C.F.R. § 200.101 until November 11, 2020)). According to

the OIG, the IGSAs were cooperative agreements governed by the UAR; according to ICE, the

IGSAs were procurement agreements that were not so governed as they were excluded from

several major provisions of the UAR. The Court understands Plaintiffs to be pointing to this very

9 The Amended Complaint does not — and it need not — take a position on whether the IGSA is either a procurement

contract or a cooperative agreement; rather, it only alleges correctly that certain provisions of 2 C.F.R. Part 200 apply

to the Agreement (see, e.g., Filing No. 129 ¶ 4), which the Court finds to be the successor of 28 C.F.R. Part 66. See

Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 78 Fed. Reg.

78608 (Dec. 26, 2013); Federal Awarding Agency Regulatory Implementation of OMB's UAR, Fed. Reg. 75880 (Dec.

19, 2014); Filing No. 75-2 at 6, art. IX ¶ 1; see also 2 C.F.R. § 2800.101.

disagreement aimed at the nature of ICE's IGSAs, born out in the 2018 OIG Report, when they

claim ICE's action exceeded its legal authority. The Court, therefore, finds Plaintiffs to allege

plausibly the agency had a general policy of disregarding UAR requirements regarding its

detention contracts.

The Court deals easily with ICE's pushback that the abdication exception in Heckler applies

only to statutory duties, and not to duties imposed by promulgated regulations. ICE cites to at

least one case that applies Hecker's exception to claims involving promulgated regulations,

undercutting ICE's argument. See Irish 4 Reprod. Health, 434 F. Supp. 3d at 698 (citing N. Ind.

Pub. Serv. Co. v. FERC, 782 F.2d 730, 745-46 (7th Cir. 1986) ("[W]e do not think that the

Commission can essentially abandon its regulatory function . . . under the guise of unreviewable

agency inaction.")). Heckler turns the presumption of reviewability into a presumption the other

way, which may be rebutted. See 470 U.S. at 832. Significantly for this case, "judicially

manageable standards 'may be found in formal and informal policy statements and regulations as

well as in statutes.'" Steenholdt v. F.A.A., 314 F.3d 633, 638 (D.C. Cir. 2003) (quoting Padula v.

Webster, 822 F.2d 97, 100 (D.C. Cir. 1987)) (emphasis added).

Moreover, Count IV's allegations, taken together, convince the Court that the alleged

general policy of abdication is sufficiently "extreme." Plaintiffs point out that ICE's own

representations over the course of this litigation confirm their argument, but the Court is not

convinced such representations extend beyond the context in which they were made. See Filing

No. 129 ¶ 319 (quoting for example Filing No. 61 at 8 ("Although ICE has the ability to exert

fiscal leverage, such as by threatening to cease sending detainees and federal funds to the Jail, it

has no supervisory control over the Jail.")). The Court looks instead to a separate conclusion made

by the OIG about ICE's non-enforcement. Specifically, a 2019 DHS OIG report evinces the same

broader pattern of non-enforcement when it finds ICE "rarely imposed financial penalties"

"[d]espite documentation of thousands of deficiencies and instances of serious harm to detainees

that occurred" at the 106 detention facilities subject to its review (Filing No. 129 ¶ 320 (citing

DHS Off. of Inspector Gen., ICE Does Not Fully Use Contracting Tools to Hold Detention Facility

Contractors Accountable for Failing to Meet Performance Standards, OIG-19-18 at 15 (Jan. 29,

2019), available at https://tinyurl.com/h5dax23s)).

Judicial review seems particularly warranted, then, in light of Plaintiffs' plausible

allegation that ICE has consciously and expressly adopted a policy of non-enforcement for

violations of federal laws governing the permissible uses of federal funds by non-Federal entities,

like Clay County. See id. ¶ 7. Plaintiffs specifically aver ICE eschewed all monitoring and

enforcement options against Clay County. See id. ¶ 317. The Agreement, it follows, is alleged as

a component piece of that conscious and express general policy that authorizes ICE to

prospectively circumvent its statutory duty under 8 U.S.C. § 1103(a)(11)(A) and accompanying

monitoring duty under 2 C.F.R. § 200.300(a). See id. ¶ 313, 314. Furthermore, it is at least

plausible to view the Agreement itself as a general enforcement policy that is impacting several

dozen detainees on any given day, see Filing No. 101-7 (Jail Daily Population for 2019-2021 of

ICE Detainees), see also Filing No. 101-1 ¶¶ 3, 4, and not just a single fact-specific resource-

allocation decision subject to Heckler discretion. Consequently, and for the reasons above, ICE's

general policy of abdication alleged in Count IV is reviewable.

4. Count IV Alleges Final Agency Action

The APA "allow[s] any person 'adversely affected or aggrieved' by agency action to obtain

judicial review thereof, so long as the decision challenged represents a 'final agency action' for

which there is no other adequate remedy in a court." Webster v. Doe, 486 U.S. 592, 599 (1988)

(quoting 5 U.S.C. §§ 701–06). The APA defines an "agency action" as "the whole or a part of an

agency rule, order, license, sanction, relief, or the equivalent or denial thereof, or failure to act." 5

U.S.C. § 551(13).

The Supreme Court has explained that the "rule, order, license, sanction, [or] relief" at issue

must "involve circumscribed, discrete agency actions." Norton v. Southern Utah Wilderness All.,

542 U.S. 55, 62 (2004). This "discreteness" requirement "precludes a broad programmatic attack"

on agency operations and "rules out judicial direction of even discrete agency action that is not

demanded by law." Id. at 64.

For an "agency action" to be "final," 5 U.S.C. § 704, two conditions must be satisfied.

"First, the action must mark the consummation of the agency's decisionmaking process — it must

not be of a merely tentative or interlocutory nature. And second, the action must be one by which

'rights or obligations have been determined,' or from which 'legal consequences will flow.'"

Bennett v. Spear, 520 U.S. 154, 177–78 (1997) (citation omitted). In other words, the final agency

action requirement "asks whether a 'terminal event' has occurred." Driftless Area Land

Conservancy v. Rural Utilities Serv., 74 F.4th 489, 493 (7th Cir. 2023) (quoting Salinas v. Railroad

Retirement Board, 141 S. Ct. 691, 697 (2021)); see also U.S. Army Corps of Engineers v. Hawkes

Co., 578 U.S. 590, 597 (2016) (quoting Bennett, 520 U.S. at 178).

ICE argues Plaintiffs challenge disparate defects in its inspection and evaluation program,

amounting to an "impermissible challenge to numerous and various matters seeking wholesale

changes to agency operations." (Filing No. 153 at 23.) Instead of asserting sufficiently discrete

final agency action, Plaintiffs have "essentially 'attached a policy label to their own amorphous

description of [ICE's] practices.'" Id. at 25 (quoting Bark v. United States Forest Serv., 37 F. Supp.

3d 41, 50 (D.D.C. 2014)). Rather than point to any specific "written rules, orders, or even guidance

documents," Plaintiffs maintain that an overarching policy is "reflected" in various disparate

datapoints. Id. (quoting Bark, 37 F. Supp. 3d at 50; Filing No. 129 ¶ 318).

As discussed earlier, the Plaintiffs need not concoct a description of ICE's practices when

it can refer instead to findings of the DHS OIG and positions articulated by ICE authorities in

response. Looking to those specific allegations, the Court finds the cases upon which ICE relies

to be sufficiently distinguishable. Unlike in Lujan v. National Wildlife Federation, Plaintiffs do

not challenge a wholesale failure of the agency to comply with an array of loosely related legal

requirements. See 497 U.S. 871, 891 (1990) (describing plaintiff's claim to include various diverse

failures from "submit[ing] certain recommendations to Congress" to "inordinate focus upon

mineral exploitation"). Plaintiffs instead challenge the discrete decision to abdicate the specific

legal obligation of enforcing the requirements of the UAR (Count IV) with respect to contracting

for ICE detentions at the Jail.

Critically, Bark was decided on a motion for summary judgment. See 37 F. Supp. 3d at

44. After being granted an opportunity for discovery, unlike here, the plaintiffs were unable to

demonstrate the challenged actions related to the granting of permits were set forth in an express

policy. Id. at 49–50. This case, only at the motion to dismiss phase, should be allowed to proceed

to discovery. Plaintiffs move beyond a "generalized complaint about agency behavior," id. at 51,

with the facts alleged in the Amended Complaint. That Plaintiffs have yet to identify a written

policy is not persuasive because "agency action need not be in writing to be judicially reviewable

as a final action." Aracely, R. v. Nielsen, 319 F. Supp. 3d 110, 138 (D.D.C. 2018) (citing Venetian

Casino Resort LLC v. Equal Emp't Opportunity Comm'n, 530 F.3d 925, 929, 931 (D.C. Cir. 2008)

(adjudicating challenge to agency's "decision . . . to adopt [an unwritten] policy of disclosing

confidential information without notice")).

In sum, Count IV plausibly shows a conscious abdication of statutory and regulatory

responsibilities – and that it was adopted at some point prior to 2018. This policy meets the

definition of a final action, which is an agency action that (1) marks the consummation of the

agency's decision-making process, and (2) by which rights or obligations have been determined,

or from which legal consequences flow. Accordingly, ICE's Motion to Dismiss is denied as to

Count IV.

B. Count III – ICE's Violations of the INA and UAR in Paying Federal Funds

Count III challenges ICE's payments to Clay County despite knowing that the County "has

used and continues to use payments from ICE for impermissible purposes" "because ICE seeks to

ensure that the County continues cooperating . . . and making the Jail available for the detention

of non-citizens." (Filing No. 129 ¶¶ 303, 304.) Plaintiffs claim ICE's payments, as well as their

decision to continue making payments, violate the INA and the UAR and are arbitrary, capricious,

and an abuse of discretion. Id. ¶¶ 307, 308, 309, 310; see id. ¶¶ 294–311.

ICE argues Count III rehashes Count II from the original Complaint: it "manifestly

challenges ICE's asserted failure to avail itself of 'a number of enforcement options to respond to'

the County's alleged misuse of federal funds, [] something that is foreclosed from review under

section 701(a)(2)." (Filing No. 153 at 21 (quoting Filing No. 129 ¶ 316)). ICE also argues Count

III fails to challenge discrete and final agency actions. See id.

The Court disagrees with ICE. Sufficiently different from its predecessor, Count III

plausibly alleges an abdication of ICE's statutory duties, and Plaintiffs have also demonstrated that

the actions at issue were final agency actions.

1. Count III Alleges Payments Judicially Reviewable under 8 U.S.C. §

1103(a)(11)(A) and 2 C.F.R. Part 200

Unlike Count II in Plaintiffs' original Complaint, which this Court found to have

"contain[ed] no factual allegations indicating the payments themselves are unlawful" (Filing No.

116 at 26), Count III of the Amended Complaint alleges ICE paid federal detention funds to Clay

County for purposes other than "clothing, medical care, necessary guard hire, and the housing,

care, and security" of detainees. 8 U.S.C. § 1103(a)(11)(A); see, e.g., Filing No. 129 ¶ 304. It

further alleges ICE makes payments to the county to maintain access "no matter the actual costs

of detention . . . , regardless of the conditions . . . , and despite the County's improper uses of the

funds," which it has known for years. Id. ¶ 306; see id. ¶ 303. Plaintiffs explain that ICE took this

action to maintain use of the Jail because it has "become increasingly dependent on the Jail to

detain non-citizens in the Chicago Area of Responsibility," since other facilities have recently

stopped accepting non-citizen detainees. Id. ¶¶ 305, 275. Unlike its former counterpart, then,

Count III alleges "unlawful agency action" instead of inaction. (Filing No. 168 at 27 (emphasis

added).)

Plaintiffs argue the underlying statute, 8 U.S.C. § 1103(a)(11)(A), clearly enumerates what

ICE is authorized to pay for and, thus, provides meaningful standards against which the Court can

judge ICE's actions. Id. at 29. It further contends that the additional standards of the UAR provide

"that only 'allowable' costs may be paid to non-federal entities using federal funds," id. at 29–30

(citing C.F.R. § 200.400(g)), and that "costs must be 'necessary and reasonable for the performance

of the Federal award'" and "adequately documented." Id. at 30 (citing C.F.R. § 200-403(a), (g)).

ICE maintains that Count III remains indistinguishable from the prior Count II (Filing No.

174 at 12). It argues Plaintiffs do not plausibly allege the Agreement is a "kind of sham"; instead,

Plaintiffs' position only posits ICE makes payments, already earmarked by the United States for

detention reimbursement, for which it "purportedly knows will not be ultimately used for that

purpose because of alleged actions by the County." Id. at 14 (first emphasis added, second

emphasis in original).

The Court recognizes first the alleged basis for Plaintiffs' conclusion that ICE's actions

were short of statutory right or without observance of procedure required by law — ICE makes

the payments not because it believes the funds would be used appropriately, but rather because it

"seeks to ensure that the County continues cooperating with ICE and making the Jail available for

the detention of non-citizens" (Filing No. 129 ¶ 304). It is of no consequence that Plaintiffs may

have directly lifted this assertion from the Court's previous order (compare Filing No. 116 at 26

(dismissing the prior Count II)), since at this stage the Court must accept as true any factual

allegations and draw inferences in the favor of Plaintiffs. See Bielanski, 550 F.3d at 633. Plaintiffs

at any rate lend additional context and explain that ICE makes such payments regardless of the

conditions and despite the improper use of the funds, which Plaintiffs aver ICE had known for

years. Regarding ICE's motivations, Plaintiffs further allege the need for a detention facility in the

Chicago Area of Responsibility (Filing No. 129 ¶ 305), which they extrapolate from, among other

allegations, laments occurring in April 2021 from ICE's Facility Compliance Officer assigned to

the Jail. See id. at ¶ 196. This purported need translates to an "increasing[] dependen[ce] on the

Jail" as and when other facilities stopped accepting non-citizen detainees. Id. ¶ 305; see id. ¶ 275.

In light of the averred "continued cooperation and availability" bases, which the Court finds

are sufficiently supported at this stage, the allegation that ICE knew about the County's

misappropriation of detention payments yet "continue[d] making payments from congressionally

appropriated funds anyway" (Filing No. 129 ¶ 6) takes on a new life. This minor shift of focus

revises Plaintiffs' claim, which now can be read to assert affirmative action on the behalf of the

agency for the payments themselves, not just ICE's "refusal to ensure the funds were ultimately

used for their intended purpose by their recipient"10 (Filing No. 116 at 27). ICE's payments,

viewed from the perspective of an exigent need to house detainees, make the agency's knowledge

of the alleged actions of the federal fund recipient — i.e., "widespread misuse" of the payments

(Filing No. 129) — an operative (albeit not determinative) fact in resolving whether ICE ran afoul

of its statutory mandate to only "make payments" for certain delineated reasons under 8 U.S.C. §

1103(a)(11)(A), and ultimately whether its actions were "arbitrary, capricious, an abuse of

discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A).

In sum, Count III is no longer Count II of yesteryear. It now alleges affirmative action —

not an unreviewable discretionary decision not to institute enforcement proceedings.11

From this perspective, the Court also distinguishes Count III from Count II of the Amended

Complaint as it relates to Heckler's presumption against judicial review. When it comes to

payments made for continued cooperation despite knowledge of misuse, the INA and UAR are not

drawn in such broad terms that there is no "law to apply"; instead a review of the statutes and

regulations allegedly violated by the agency's actions reveals there is sufficient guidance to apply

by a reviewing court. The INA authorizes payments only for six delineated items related to

detained persons. See 8 U.S.C. § 1103(a)(11)(A). 2 C.F.R. § 200.300(a) directs ICE to "manage

and administer" payments in a manner that "ensure[s]" the funding is expended and the associated

programs are implemented "in full accordance with . . . Federal Law[] and public policy

requirements." (Emphasis added). The Court finds, at a minimum, that managing and

10 The Court acknowledges the quoted clause's reference to Count III is an inadvertent scrivener's error.

11 With that said, the Court distinguishes ICE's "payments" (Filing No. 129 ¶ 308) from its "decision to continue

making payments", id. ¶ 307, for reasons explained in its previous order and related to its previous claims that ICE

unlawfully failed to enforce the INA and UAR against Clay County (see Filing No. 116 at 28; Filing No. 1 at ¶ 273).

Nevertheless, the latter's inclusion does not mandate dismissal of the entire claim in light of the other changes made.

administering payments in "full accordance" with the mandates of the INA is a meaningful

standard to apply to payments of federal funds to the Jail in light of alleged foreknowledge. This

is to say nothing about the other provisions found in the UAR, which sets cost-allowance,

accounting, and auditing requirements and provides "guidance to Federal agencies that helps

ensure consistent and uniform government-wide policies and procedures for management of the

agencies' . . . agreements." 2 C.F.R. § 1.200(a) (describing the purpose of certain chapters within

Title 2 of the Federal Regulations that contain the UAR).

The Court finds that Count III sufficiently alleges that ICE's actions in paying federal funds

under the Agreement is short of statutory right, without observance of procedure required by law,

or arbitrary, capricious, and an abuse of discretion.

2. Count III Alleges Final Agency Action

The Court's previous Order dismissed Count II of the original Complaint without finding

whether or not each of the payments were final agency action (see Filing No. 116 at 26). ICE

argues now that Count III does not allege discrete and final agency action, since "agency action

does not encompass all day-to-day activities of an agency, such as 'operating a program, or

performing a contract.'" (Filing No. 153 at 26 (quoting Vill. of Bald Head Island v. U.S. Army

Corps of Engineers, 714 F.3d 186, 193 (4th Cir. 2013)).) Making payments on a contract, not

something akin to an order or a rule, is a "moving target" far from discrete or final, as it

"challeng[es] a category of asserted agency action encompassing perhaps dozens of payments over

years, which will only grow as the litigation progresses and further payments are made." Id.

Plaintiffs address the Bennett prongs in arguing that the payments signify "the culmination

of ICE's decisionmaking as to whether to pay for detention at the Jail for the period." (Filing No.

168 at 43.) "Moreover, legal consequences flow from these payments: each one authorizes ICE to

detain non-citizens at the Jail and allows the County to spend the money on unrelated expenses."

Id.

At first glance, the Agreement attached to the Amended Complaint seems to provide

support for the proposition that final agency action is afoot. Initially, IGSA No. 28-07-005 was

entered into "for the housing, safekeeping, and subsistence of federal prisoners" (Filing No. 72-2

at 2). Then, in March 2014, ICE entered into a "Unilateral Modification." See Filing No. 1-1 at 9

(boxes 3, 10A, 13D, and 16C). On the second page, the modification states:

The service provider [(Clay County)] agrees to perform to the point that does not

exceed the total amount currently allotted to the items funded under this task order.

The Government will not be obligated to reimburse the service provider in excess

of the amount allotted to those item(s) for performance beyond the funding allotted.

Id. at 10. A subsequent modification provided that, effective September 1, 2015, Clay County

would "comply with the following optimal requirement(s) under the ICE 2011 Performance Based

National Detention Standards (PBNDS 2011): Standard 5.4: Recreation," meaning Clay County

would "purchase additional recreation equipment for the General Population and Special

Management Units."12 (Filing No. 1-2 at 6.)

The Court understands Plaintiffs' position, however, to assert final agency action arising from

"ICE's payments"13 (Filing No. 129 ¶ 308). The Court notes the novelty in the position that each

tender of a payment itself constitutes final agency action. Plaintiff has not identified any decisions

in this Circuit or beyond explicitly holding that payments — made pursuant to a procurement

12 No party appears to dispute, here or elsewhere, that the modifications referenced in the Amended Complaint were

still operative and governed the payments in question for the time period relevant to this lawsuit, and the Court will

draw such inferences in Plaintiffs' favor at this stage (see Filing No. 75-2 at 5, art. V ("This agreement shall be in

effect indefinitely until terminated in writing by either party."); cf. Filing No. 1-1 at 9 (stating that funding for the

order under the attached modification was "estimated to cover performance through April 30, 2014")).

13 See supra note 10.

contract such as the Agreement, or to any "Federal award[]" to a non–Federal entity, 2 C.F.R. §

200.101, like Clay County — constitute final agency action, apart or separate from the agreement

under which they arise, as Plaintiffs' position implies.

Despite similarities, crucial differences exist between the agency action in the cases to

which Plaintiffs point and the action in this case. Plaintiffs cite cases involving formal agency

actions unlike those here — such as the legality of a particular agency's funding authorization or

decision to withhold advance refunds, or some other agency policy, like methodology or eligibility.

See Head Start, 46 F.3d at 631; California v. Trump, 963 F.3d 926, 933, 941–42 (9th Cir. 2020);

Shawnee Tribe v. Mnuchin, 984 F.3d 94, 101 (D.C. Cir. 2021); Scholl v. Mnuchin, 489 F. Supp.

3d 1008, 1027–28 (N.D. Cal. 2020); Lloyd v. Illinois Reg'l Transp. Auth., 548 F. Supp. 575, 588–

90 (N.D. Ill. 1982). To the extent Overton Park involved the "the expenditure of federal funds,"

it is clear that the holding fundamentally addressed the defendant agency's "decision to allow" the

expenditure in light of statutory prohibitions entirely dissimilar to those before this Court. 401

U.S. at 414; see id. at 405–05 (e.g., the Highway Act of 1968 requires "all possible planning to

minimize harm").

Notwithstanding these concerns, the Court determines that the payments "mark the

consummation[14] of the agency's decisionmaking process", Hawkes, 578 U.S. at 597 (quoting

Bennett, 520 U.S. at 177–78), and are not of a tentative or interlocutory nature. ICE brings to the

Court's attention that these authorized payments "reimburse" Clay County for actual and allowable

costs (Filing No. 174 at 13–14 (citing Filing No. 75-2 at 5, art. VI ¶¶ 1, 2, 3)). The Agreement

further provides that the local government prepares and submits original, separate invoices "each

14 Black's Law Dictionary does not provide the definition for "consummation" and defines the verb "consummate" as:

"1. To bring to completion; . . . 2. To achieve; to fulfill. 3. To perfect; to carry to the highest degree." Consummate,

BLACK'S LAW DICTIONARY (11th ed. 2019).

month" "for certification and payment" (Filing No. 75-2 at 5, art. VII ¶ 1). Thus, by reimbursing

allowable costs incurred, ICE's payments perfect (or bring to completion) a decision to house

detainees under the Agreement for the relevant period. The Court additionally finds both (1) the

Jail's provision of services described in 8 U.S.C. § 1103(a)(11)(A), and (2) the continuation of an

"indefinite[]" contract, id. at 5, art. V, made pursuant to 8 U.S.C. § 1103(a)(11)(B), to be legal

consequences flowing from ICE's payments. In concluding such "terminal event[s]" to have

occurred, Rural Utilities Serv., 74 F.4th at 493 (quoting Salinas, 141 S. Ct. at 697), the Court

interprets the APA's finality requirement in a "flexible" and "pragmatic way." Dhakal v. Sessions,

895 F.3d 532, 539 (7th Cir. 2018).

ICE's likening of the payments to "operating a program, or performing a contract" (Filing

No. 153 (quoting Vill. of Bald Head Island, 714 F.3d at 193)) does not convince the Court to the

contrary. Plaintiffs do not ask the Court to intervene in a "day-to-day managerial role over agency

operations", Vill. of Bald Head Island, 714 F.3d at 195; rather, they seek judicial review of a finite

set of circumscribed and discrete actions, provided for by a certain procurement agreement and

governed by statutory restrictions on federal awards.

On the whole, the Court finds Defendants disregard the breadth of the definition of "agency

action" under 5 U.S.C. § 551(13). Section 551(13) includes the residual term "the equivalent . . .

thereof" and also incorporates by reference the fourteen examples of "agency action" in section

551(11)'s definition of "relief," which in turn includes, in relevant part, "part of an agency . . . grant

of money." At the very least, issuing the payments was an "equivalent" action equally discrete to

the listed terms in section 551(13) that would meet the APA's "expansive" definition of "agency

action." See Planned Parenthood of New York City, Inc. v. U.S. Dep't of Health & Human Servs.,

337 F. Supp. 3d 308, 327 (S.D.N.Y. 2018). Accordingly, ICE's Motion to Dismiss is granted as

to Count II.

IV. CONCLUSION

A motion to dismiss pursuant to Rule 12(b)(6) does not test whether the plaintiff will

prevail on the merits but instead whether the claimant has properly stated a claim. See Scheuer v.

Rhodes, 416 U.S. 232, 236 (1974). For the foregoing reasons, ICE's Motion to Dismiss (Filing

No. 152) is GRANTED in part and DENIED in part. The motion is granted as to Count II and

Count II is DISMISSED with prejudice because the Court cannot substitute its judgment for that

of ICE and an amended complaint as to the accompanying requests for relief would be futile.!>

The motion is DENIED as to Counts III and IV, as the Court finds dismissal improper.

SO ORDERED.

Date: 8/8/2024 Xone Date natt

Hon. Tanya Walton Pratt, Chief Judge

United States District Court

DISTRIBUTION Southern District of Indiana

Jacob Antrim

BOSE MCKINNEY & EVANS LLP

jantrim@boselaw.com

Gina R. Bohannon

SIDLEY AUSTIN LLP

gbohannon@sidley.com

Bradley M. Dick

BOSE MCKINNEY & EVANS, LLP (Indianapolis)

bdick@boselaw.com

Mark Feldman

NATIONAL IMMIGRANT JUSTICE CENTER

mfeldman@immigrantjustice.org

> The Court is under no obligation to allow further amendments where doing so would be futile, as it would be here.

See Doermer v. Callen, 847 F.3d 522, 528 (7th Cir. 2017).

34

Mark Fleming

mfleming@immigrantjustice.org

Mary Georgevich

NATIONAL IMMIGRANT JUSTICE CENTER

mgeorgevich@immigrantjustice.org

Taisa M. Goodnature

DOJ-Civ

taisa.m.goodnature@usdoj.gov

Robert N. Hochman

SIDLEY AUSTIN LLP

rhochman@sidley.com

Benjamin N. Kelton

SIDLEY AUSTIN LLP

bkelton@sidley.com

Andrew M. McNeil

BOSE MCKINNEY & EVANS, LLP (Indianapolis)

amcneil@boselaw.com

John Skakun, III

SIDLEY AUSTIN LLP

jskakun@sidley.com

Ross McNeill Slaughter

DOJ-Civ

ross.m.slaughter@usdoj.gov

Stephen C. Unger

BOSE MCKINNEY & EVANS, LLP (Indianapolis)

sunger@boselaw.com

Thomas Aaron Weber

SIDLEY AUSTIN LLP

tweber@sidley.com

Jennifer Martin Wheeler

SIDLEY AUSTIN LLP

jwheeler@sidley.com

Shelese M. Woods

UNITED STATES ATTORNEY'S OFFICE (Indianapolis)

shelese.woods@usdoj.gov

Keren Hart Zwick

NATIONAL IMMIGRANT JUSTICE CENTER

kzwick@immigrantjustice.org