Wednesday, May 11, 2016

Which Suit Takes Priority in the NC v US Battle Over NC "Bathroom Law"?

by Michael Dorf

Perhaps because I'm immersed in grading Federal Courts exams, the news that North Carolina and the United States sued each other on Monday led me to ponder procedural rather than simply substantive questions in the dispute. In particular, given that two mirror-image lawsuits were filed on the same day, which one takes priority? And why does it matter?

Let's begin with a recap of the filings. First, the Governor and Secretary of the Dep't of Public Safety in North Carolina sued the U.S., the federal Dep't of Justice, the Attorney General of the U.S., and the Principal Deputy Assistant AG. The complaint in what I'll call the "NC lawsuit" is here. It alleges that North Carolina's HB2--which, among other things, requires transgender persons using sex-segregated public restrooms to use the room that corresponds to their at-birth biological sex rather than their gender identity--does not violate federal law. In particular, North Carolina seeks a declaration that HB2 does not violate Title VII of the 1964 Civil Rights Act or the Violence Against Women Act (VAWA).

Just a few hours after the North Carolina lawsuit was filed, the U.S. filed its own lawsuit against North Carolina. The U.S. complaint in the "US lawsuit" is mostly, but not entirely, a mirror image of the NC lawsuit.

There are three main differences. First, the parties are not completely identical. In the US lawsuit, the plaintiff is the U.S., not joined by the AG or her Principal Deputy Ass't AG. And the defendants are the state of North Carolina, its governor, the Dep't of Public Safety (rather than its Secretary, as in the NC lawsuit), the University of North Carolina (UNC), and the Board of Governors of UNC.

Second, whereas the NC complaint only challenges the application of Title VII and VAWA to HB2, the US complaint asserts that, in addition, enforcement of HB2 at UNC would violate Title IX of the Education Amendments of 1972.

Third, the NC lawsuit was filed in the Western Division of the Eastern District of North Carolina, whereas the US lawsuit was filed in the Middle District of North Carolina. That difference answers the question why it matters which suit takes priority. We can assume that notwithstanding the minor differences in the parties and the issues as framed, a judgment in either case would effectively resolve the issue. If federal law bars transgender discrimination and HB2 violates that prohibition, the US parties will win both lawsuits. If not, the NC parties will win both lawsuits. But a different federal district judge will hear the case depending on which case takes priority.

Does that really matter? Whether discrimination on the basis of gender identity or trans status counts as sex discrimination within the meaning of various federal antidiscrimination laws is a pure question of law. So is the question whether the EEOC is entitled to Chevron deference for its determination that federal laws already cover anti-LGBT discrimination. Appeals from both the EDNC and the MDNC go to the US Court of Appeals for the Fourth Circuit, which reviews district court determinations of pure legal questions de novo, that is, without any deference. Thus, it does not appear to matter who the federal district judge is.

But maybe one or both of the cases could turn on findings of fact. The US complaint alleges that transgender state employees and transgender persons seeking access to public restroom facilities in NC suffer "emotional harm, mental anguish, distress, humiliation, and indignity . . . ." The NC complaint mostly makes legal claims, especially the claim that NC does not treat transgender persons differently from cisgender persons, because everyone has to use the restroom that corresponds to their biological sex at birth. (Editorial aside per Anatole France: "The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread.") But there are embedded factual allegations as well, such as that no transgender North Carolinians have been injured by HB2. Because findings of fact are reviewed under the deferential clear-error standard, two district judges could hear the same evidence and reach different conclusions, each of which would be sustained on appeal. Thus, the assignment of the case to one or another district judge could make a difference.

So, which case will proceed? Although the law isn't 100% clear, I would bet on the US suit.

It is not obvious to me that there is even jurisdiction over the NC lawsuit. The NC plaintiffs seek only declaratory relief (plus a generic "such other relief as the Court deems just and proper"). Now the federal Declaratory Judgment Act generally permits prospective defendants to a federal-question lawsuit for damages or injunctive relief to sue anticipatorily, but there is an exception that seems to encompass the NC lawsuit. In Franchise Tax Board v. Construction Laborers Vacation Trust the SCOTUS held that there is no federal question jurisdiction via the Declaratory Judgment Act over a lawsuit by a state (or state agency or other official suing on behalf of the state) seeking a declaratory judgment that its own law is not pre-empted by federal law.

Although Franchise Tax Board did not involve a suit against the federal government, its rule might apply in such a case--although perhaps it might not. The basic idea was that the state is not prejudiced by having to litigate the federal pre-emption issue when raised by a defendant to an enforcement action in state court. That doesn't exactly translate to the current situation, because the federal government wouldn't be a defendant to a state enforcement action under HB2 under any circumstances. But regardless of the defendant in the hypothetical action to enforce HB2 in state court, the mere claim by the state that its own law is not pre-empted does not seem to fit the justification for the Declaratory Judgment Act--which is to allow prospective defendants to come to court as plaintiffs so that they can learn their rights before risking violating a law. So I think that Franchise Tax Board could apply after all.

At the very least, it seems that there is some uncertainty about whether federal court jurisdiction over the NC lawsuit is proper. Accordingly, in deciding whether to consolidate the NC lawsuit under the rubric of the US lawsuit or vice-versa, I would expect the Panel on Multidistrict Litigation (which decides whether and where to consolidate cases raising common issues pending in multiple district courts) to prefer the US lawsuit, where jurisdiction is clear. In addition to avoiding a potential Franchise Tax Board issue down the road, other things being equal, there probably ought to be a preference for the enforcement action as opposed to the declaratory judgment action that mirrors the enforcement action.


Howard Wasserman said...

Interesting that you see this going through MDL, since there are only two cases. I would have thought the US would move in the WDNC for change of venue under § 1404 (the public interest factors underlying consolidation in a single district), then consolidate in the MDNC.

Michael C. Dorf said...

Oh, I do see that as an alternative in the relief sought from the motion to dismiss that I anticipate the U.S. will file.

Joe said...

The link for Franchise Tax Board v. Construction Laborers Vacation Trust goes to an earlier case though one cited as precedent.

Michael C. Dorf said...

Joe, thanks for the heads-up. I have fixed the link.