Opinion ID: 4466387
Heading Depth: 2
Heading Rank: 2

Heading: Appellant’s Interests Fall Within the “Zone of

Text: Interests” Protected by § 142 In Lexmark International, Inc. v. Static Control Components, Inc., 572 U.S. 118, 129 (2014), the Supreme Court explained the “lenient approach” that the courts must follow in determining whether a party has stated a cause of action under the APA: First, we presume that a statutory cause of action extends only to plaintiffs whose interests “fall within the zone of interests protected by the law invoked.” The modern “zone of interests” formulation originated in Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150 (1970), as a limitation on the cause of action for judicial review conferred by the Administrative Procedure Act (APA). We have since made clear, however, that it applies to all statutorily created causes of action; that it is a “requirement of general application”; and that Congress is presumed to “legislate against the background of” the zone-of-interests limitation, “which applies unless it is expressly negated.” Bennett v. Spear, 520 U.S. 154, 163 (1997). . . . We have said, in the APA context, that the test is not “‘especially demanding,’” Match-E-Be-NashShe-Wish Band of Pottawatomi Indians v. Patchak, 18 567 U.S. 209, 225 (2012). In that context we have often “conspicuously included the word ‘arguably’ in the test to indicate that the benefit of any doubt goes to the plaintiff,” and have said that the test “forecloses suit only when a plaintiff’s ‘interests are so marginally related to or inconsistent with the purposes implicit in the statute that it cannot reasonably be assumed that’” Congress authorized that plaintiff to sue. Id. That lenient approach is an appropriate means of preserving the flexibility of the APA’s omnibus judicial-review provision, which permits suit for violations of numerous statutes of varying character that do not themselves include causes of action for judicial review. Id. at 129-30 (citations and brackets omitted). DOT and Intervenor AAF argue that this case should be dismissed because Appellant’s interests are not within the zone-of-interests of 26 U.S.C. § 142. In pressing this position, DOT argues that the District Court erred in concluding that “the interests at stake in § 142 . . . are illuminated by § 147(f), which requires State or local government approval for certain PABs to qualify for tax exemption.” Indian River Cty., 348 F. Supp. 3d at 29. In DOT’s view, “the arguable existence of a cause of action under Section 147(f) does not give Plaintiffs a cause of action to sue for an alleged violation of Section 142.” DOT Br. at 16. DOT’s position is shortsighted, and it reflects a distorted view of the District Court’s decision. What the District Court said was this: In applying the zone-of-interests test, courts do not look at the specific provision said to have been violated in complete isolation. At the same time, 19 courts must police the extent to which they look beyond the provision invoked to ensure that casting a wider net does not deprive the zone-of-interests test of virtually all meaning. Accordingly, a court must limit its analysis to the provision invoked for suit, as clarified by any provisions to which it bears an integral relationship. In this case, then, the Court must first determine whether § 147(f) bears an integral relationship with § 142, the provision upon which Indian River County sues. The Court concludes that the two provisions do bear an integral relationship. They form adjacent requirements for PABs used to finance certain categories of facilities to qualify for tax-exempt status: § 142 enumerates the types of facilities, and § 147(f) ensures public approval and democratic accountability for their construction. Absent § 147(f) approval, PABs used to finance a § 142 facility cannot be tax-exempt; and PABs approved pursuant to § 147(f) are not tax-exempt unless they are used to finance a § 142 facility. Most importantly, each requirement evinces a common purpose: ensuring that when the public fisc forgoes revenue through tax-exempt bonds, those bonds are used to benefit the public. Indian River Cty., 348 F. Supp. 3d at 29-30 (footnote, citations, quotation marks, and brackets omitted). This is a perfectly reasonable construction of the zone-of-interests test. The simple point made by the District Court is that “[b]y demonstrating that § 142 and § 147(f) bear an integral relationship, the County has illuminated § 142 in a way that suggests Congress’s intent was indeed to allow State and local 20 governments to ensure public benefit would accrue from projects financed by tax-exempt bonds.” Id. at 31. The District Court did not say, as DOT suggests, that the arguable existence of a cause of action under § 147(f) gives Appellant a cause of action to sue for an alleged violation of § 142. In any event, we need not tarry further over the District Court’s decision because we hold that Appellant is within the zone-of-interests of 26 U.S.C. § 142(m) for reasons analogous to those discussed in Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians, 567 U.S. at 224-28. Just as the Court noted in that case, we note here that there is no dispute over the fact that Appellant’s environmental and safety concerns are matters of the sort that DOT surely will have “in mind” when exercising its authority to allocate PABs pursuant to § 142. Id. at 227. This alone is enough to show that Appellant’s asserted interests at least arguably fall within the zone-of-interests protected by § 142. DOT has discretion under the statute to allocate PABs to qualified facilities. 26 U.S.C. § 142(m)(2)(C). And nothing in the statute precludes DOT from considering local government concerns and environmental issues when evaluating PAB allocations under § 142(m). Indeed, DOT instructs PAB applicants to “[i]ndicate the current status of milestones on [the estimated timeline provided], including all necessary permits and environmental approvals.” Notice of Solicitation and Request for Comments, Applications for Authority for TaxExempt Financing of Highway Projects and Rail-Truck Transfer Facilities, 71 Fed. Reg. 642, 643 (Jan. 5, 2006) (emphasis added). DOT also instructs applicants to “[p]rovide a copy of a resolution adopted in accordance with state or local law authorizing the issuance of a specific issue of obligations [as required by section 147(f)].” Id. AAF’s application 21 provided all of this required information. J.A. 4522, 4532-34, 4545. DOT’s position regarding the zone-of-interests inquiry is obviously wanting because it fails to take account of the fact that Appellant’s cause of action arises under the APA, not under the Code. As noted above, the zone-of-interests test is not “especially demanding” with respect to matters arising under the APA, and “the benefit of any doubt goes to the plaintiff.” Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians, 567 U.S. at 225 (citation omitted). Furthermore, the Supreme Court has “consistently held that for a plaintiff’s interests to be arguably within the zone of interests to be protected by a statute, there does not have to be an indication of congressional purpose to benefit the would-be plaintiff.” Nat’l Credit Union Admin. v. First Nat. Bank & Tr. Co., 522 U.S. 479, 492 (1998) (internal quotation marks and citation omitted). And a plaintiff certainly need not be expressly listed as a beneficiary of a statutory provision in order to be within its protected zone-of-interests. Finally, the Supreme Court has emphasized that the zone-of-interests test “forecloses suit only when a plaintiff’s ‘interests are so marginally related to or inconsistent with the purposes implicit in the statute that it cannot reasonably be assumed that Congress intended to permit the suit.’” Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians, 567 U.S. at 225 (citation omitted). That certainly is not this case. In assessing whether a plaintiff’s interests fall within the zone-of-interests protected by a statute, we must consider the “context and purpose” of the relevant statutory provisions and regulations at issue. Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians, 567 U.S. at 226. “‘[W]e do not look at the specific provision said to have been violated in complete isolation[,]’ but rather in combination with other provisions to 22 which it bears an ‘integral relationship.’” Nat’l Petrochemical & Refiners Ass’n v. EPA, 287 F.3d 1130, 1147 (D.C. Cir. 2002) (second alteration in original) (citation omitted). In applying these principles, it is quite clear that Appellant – a local government entity whose citizens will be directly affected by the AAF Project – has compelling interests that fall within the zone-of-interests protected by the statute. The statutory context and purpose make this clear. 26 U.S.C. § 141(e)(1)(A) outlines certain types of PABs that can constitute “qualified bond[s],” including “exempt facility bond[s].” An “exempt facility bond” includes a bond whose proceeds from its issue are used to finance “qualified highway or surface freight transfer facilities.” 26 U.S.C. § 142(a)(15). Section 142(m)(1)(A) then defines “qualified highway or surface freight transfer facilities” as “any surface transportation project which receives Federal assistance under title 23, United States Code.” Title 23, in turn, authorizes federal funding for, inter alia, “the elimination of hazards of railway-highway crossings.” 23 U.S.C. § 130(a). It cannot be doubted that Indian River County is seriously concerned about the effects of any surface transportation project that cuts through the County. Nor can it be doubted that Indian River County has a strong interest in limiting or removing any hazards posed by railway-highway crossings in the County. Therefore, on the record in this case, it is not difficult to conclude that DOT’s allocation of PABs pursuant to § 142(m) implicates important interests of Indian River County. The County is a “reasonable—indeed, predictable—challenger[] of the Secretary’s decisions” regarding PAB allocations in a case of this sort. Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians, 567 U.S. at 227. Given this context, we reject the suggestion made by DOT and Intervenor AAF that Indian River County’s interests are 23 only “marginally related to” DOT allocations of tax-exempt qualified Private Activity Bonds pursuant to 26 U.S.C. § 142(m)(1)(A). We therefore affirm the judgment of the District Court that Indian River County’s interests are within the zone-of-interests of 26 U.S.C. § 142.