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MARK D. ROSENBAUM, SBN 59940 mrosenbaum@aclu-sc.org ACLU FOUNDATION OF SOUTHERN CALIFORNIA 1313 W. 8th Street Los Angeles, CA 90017 T: (213) 977-5220, F: (213) 417-2220 RONALD L. OLSON, SBN 44597 Ron.Olson@mto.com MUNGER, TOLLES & OLSON LLP 355 South Grand Avenue, 35th Fl, Los Angeles CA 90071-1560 T: (213) 683-9100, F: (213) 683-5111 JOHN C. ULIN, SBN 165524 John.Ulin@aporter.com ARNOLD & PORTER, LLP 777 South Figueroa Street Los Angeles, CA 90017 T: (213) 243-4228, F: (213) 243-4199 Attorneys for Plaintiffs (Additional counsel listed on next page) LAURENCE H. TRIBE, SBN 39441 tribe@law.harvard.edu HARVARD LAW SCHOOL* Hauser 420, 1575 Massachusetts Ave. Cambridge, MA 02138 T: (617) 495-1767 GARY L. BLASI, SBN 70190 blasi@law.ucla.edu UCLA SCHOOL OF LAW* 405 Hilgard Avenue Los Angeles, California 90024 T: (310) 206-9431, F: (310) 206-1234 AMOS E. HARTSTON, SBN 186471 ahartston@innercitylaw.org INNER CITY LAW CENTER 1309 East Seventh Street Los Angeles, CA 90021 T: (213) 891-2880, F: (213) 891-2888 *For identification purposes only UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA GREGORY VALENTINI, et al., Plaintiffs, v. ERIC SHINSEKI, et al., Defendants. Case No. CV-11-04846-SJO (MRW)x The Honorable S. James Otero PLAINTIFFS NOTICE OF MOTION AND MOTION FOR SUMMARY JUDGMENT; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF [NO HEARING DATE]

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Additional Counsel PETER ELIASBERG, SBN 189110 peliasberg@aclu-sc.org DAVID B. SAPP, SBN 264464 dsapp@aclu-sc.org ACLU FOUNDATION OF SOUTHERN CALIFORNIA 1313 W. 8th Street Los Angeles, CA 90017 T: (213) 977-5220, F: (213) 417-2220 ADAM MURRAY, SBN 199430 amurray@innercitylaw.org MELISSA A. TYNER, SBN 269649 mtyner@innercitylaw.org ELIZABETH HAMAN KUGLER, SBN 273928 EKugler@innercitylaw.org INNER CITY LAW CENTER 1309 East Seventh Street Los Angeles, CA 90021 T: (213) 891-2880, F: (213) 891-2888 JONATHAN MASSEY jmassey@masseygail.com Pro Hac Vice MASSEY & GAIL LLP 1325 G St. NW, Suite 500 Washington, D.C. 20005 T: (202) 652-4511, F: (312) 379-0467

ERIC SHAPLAND, SBN 193853 Eric.Shapland@aporter.com JAMES J. FINSTEN, SBN 234999 James.Finsten@aporter.com JACOB K. POORMAN, SBN 262261 Jacob.Poorman@aporter.com BRIAN MARTINEZ, SBN 274210 brian.martinez@aporter.com ARNOLD & PORTER, LLP 777 South Figueroa Street Los Angeles, CA 90017 T: (213) 243-4228, F: (213) 243-4199 LEONARD GAIL lgail@masseygail.com Pro Hac Vice Massey & Gail LLP 50 East Washington St., Suite 400 Chicago, IL 60602 T: (312) 283-1590, F: (312) 379-0467

BRADLEY S. PHILLIPS, SBN 85263 Brad.Phillips@mto.com DAVID TAYLOR, SBN 247433 David.Taylor@mto.com MUNGER, TOLLES & OLSON LLP 355 South Grand Avenue, 35th Fl, Los Angeles CA 90071-1560 T: (213) 683-9100, F: (213) 683-5111

-2MEM. OF P. & A. IN SUPP. OF PLS. MOT. FOR SUMM. J.

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NOTICE OF MOTION AND MOTION TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that pursuant to the Courts February 13, 2013 Order (Dkt. No. 111), Plaintiffs, by and through their undersigned counsel, hereby move this Court for summary judgment pursuant to Federal Rule of Civil Procedure 56(a). This Motion is based upon this Notice of Motion and Motion, the attached Memorandum of Points and Authorities, the Administrative Record, the prior Orders of this Court, the complete files and records in this action, and such other written or oral arguments that may be presented to the Court. This Motion is made following a conference of counsel held pursuant to Local Rule 7-3, which took place on March 22 and April 25, 2013. Plaintiffs respectfully request the opportunity for oral argument once the briefing on the cross-motions for summary judgment is completed.

Dated: May 10, 2013.

ARNOLD & PORTER LLP

By:

/s/ John C. Ulin John C. Ulin Attorneys for Plaintiffs

PLS. NOTICE OF MOT. AND MOT. FOR SUMM. J.

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 V. B. 4. 3. III. IV. B. C. I. II.

TABLE OF CONTENTS Page INTRODUCTION ............................................................................................... 1 BACKGROUND ................................................................................................. 2 A. Statutory Framework Governing the Challenged Leases ......................... 2 1. 2. 3. Health-Care Resource Sharing Authority ....................................... 3 Enhanced Use Lease Authority ...................................................... 4 Restrictions on Disposition of the WLA Campus .......................... 5

The Administrative Record ....................................................................... 5 Plaintiffs APA Claim ............................................................................... 8

LEGAL STANDARD ......................................................................................... 8 ARGUMENT....................................................................................................... 9 A. The Challenged Leases Are Void Because They Exceed Unambiguous Limits on DVAs Power To Share Health-Care Resources ................................................................................................ 10 1. 2. Congress Has Unambiguously Defined the Phrase Health-Care Resource ............................................................... 11 Reading 8153 to Authorize the Challenged Leases Would Be Inconsistent with the Broader Statutory Structure Regulating Use of DVA Property ................................. 13 Legislative History Confirms that the Challenged Leases Are Contrary to Congresss Intent ................................................ 14 The Challenged Leases Exceed DVAs Authority to Share Health-Care Resources ....................................................... 16

Even Assuming the ESA Statute is Ambiguous, DVAs Decisions Are Not Due Any Deference .................................................. 21

CONCLUSION ................................................................................................. 22

-iMEM. OF P. & A. IN SUPP. OF PLS. MOT. FOR SUMM. J.

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TABLE OF AUTHORITIES

Page(s)

Boise Cascade Corp. v. U.S. E.P.A., 942 F.2d 1427 (9th Cir. 1991) ........................................................................... 15 Chevron U.S.A. Inc. v. Natural Resources Defense Council, 467 U.S. 837, 104 S. Ct. 2778, 81 L. Ed. 2d 694 (1984) ........................9, 10, 21 United States v. Lacy, 119 F.3d 742 (9th Cir.1997) .............................................................................. 12 United States v. Mead Corp., 533 U.S. 218, 121 S. Ct. 2164, 150 L. Ed. 2d 292 (2001) ............................ 9, 21 United States v. Wahid, 614 F.3d 1009 (9th Cir. 2010) ........................................................................... 14 Whitman v. Am. Trucking Assn, 531 U.S. 457, 121 S. Ct. 903, 149 L. Ed. 2d 1 (2001) ...................................... 22 Wilderness Socy v. U.S. Fish & Wildlife Serv., 353 F.3d 1051 (9th Cir. 2003) (en banc), amended on rehg en banc on other grounds, 360 F.3d 1374 (9th Cir. 2004) .......................................................8, 9, 10, 21, 22 Wilson v. C.I.R., 705 F.3d 980 (9th Cir. 2013) ....................................................................... 11, 15 STATUTES, RULES AND REGULATIONS 38 C.F.R. 17.142 ......................................................................................................... 6 5 U.S.C. 701-708 ...................................................................................................... 8 5 U.S.C. 706(2)(A)...............................................................................................8, 9, 10 5 U.S.C. 706(2)(C) ................................................................................................... 8, 10 38 U.S.C. 1701(5) ................................................................................................. 3, 12 38 U.S.C. 1701(6) ................................................................................................. 3, 12 38 U.S.C. 1782 ...................................................................................................... 3, 12 38 U.S.C. 1783 ...................................................................................................... 3, 12 38 U.S.C. 5022 .......................................................................................................... 21 38 U.S.C. 8122 .......................................................................................................... 21 - ii MEM. OF P. & A. IN SUPP. OF PLS. MOT. FOR SUMM. J.

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38 U.S.C. 8151 ...................................................................................................... 3, 11 38 U.S.C. 8151-8153 .......................................................................................passim 38 U.S.C. 8152 ............................................................................................................ 3 38 U.S.C. 8152(1) .........................................................................................11, 12, 13 38 U.S.C. 8153 ..........................................................................4, 6, 10, 13, 14, 15, 21 38 U.S.C. 8153(a) ..................................................................................................... 12 38 U.S.C. 8153(a)(1)................................................................................................... 4 38 U.S.C. 8153(a)(3)(A) ........................................................................................... 12 38 U.S.C. 8153(a)(3)(B)(ii) ...................................................................................... 12 38 U.S.C. 8161-69 .............................................................................................. 2, 15 38 U.S.C. 8162 ............................................................................................................ 5 38 U.S.C. 8162(a)(2)................................................................................................... 5 38 U.S.C. 8162(a)(2)(i)-(ii)......................................................................................... 4 38 U.S.C. 8162(a)(2)(B) .................................................................................4, 13, 15 38 U.S.C. 8162(c)(1)................................................................................................... 2 38 U.S.C. 8163 ............................................................................................................ 5 38 U.S.C. 8165(a)(1)................................................................................................... 4 Consolidated Appropriations Act, 2008, Pub L. No. 110-161, 224(c), 121 Stat. 2272 (2007) ................................... 5, 15 Honoring Americas Veterans and Caring for Camp LeJeune Families Act of 2012 (Pub. L. No. 112-154, 126 Stat. 1165 (2012) ................................................ 5, 15 Local Rule 7-3................................................................................................................ 8 Priority VA Health Care For Persian Gulf Veterans, Pub. L. No. 103-210, 3(a), 107 Stat. 2497 (1993) .......................................... 16 Title 38 of the U.S. Code ...................................................................................2, 14, 15 Veterans Millennium Health Care and Benefits Act, Pub. L. No. 106-117, Title II, 208(a), (b), 113 Stat. 1567 (1999) (former 38 U.S.C. 8162(a)(2)(A)(i)-(iii), repealed 2012) .......................... 4, 13 Veterans Benefits Programs Improvement Act of 1991, Pub. L. No. 102-86, 401(a), 105 Stat. 417 (1991) ............................................ 5 - iii MEM. OF P. & A. IN SUPP. OF PLS. MOT. FOR SUMM. J.

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OTHER AUTHORITIES S. Rep. 104-372 (1996) ................................................................................................ 16

- iv MEM. OF P. & A. IN SUPP. OF PLS. MOT. FOR SUMM. J.

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MEMORANDUM OF POINTS AND AUTHORITIES INTRODUCTION Congress granted the Department of Veterans Affairs (DVA) authority to enter into agreements to share health-care resources with third parties pursuant to 38 U.S.C. 8151-53. Congress made crystal clear in both its statement of congressional purpose and the statutory definitions that this authority to enter into health-care resource sharing agreements extends only to services, equipment, and space related directly to health care for veterans. DVA has, however, elected to ignore Congresss intent and to instead treat these provisions as a blanket grant of authority to lease its property to any entity for any purpose, including ones that have nothing at all to do with providing health care to veterans. DVAs approach is simple: if it calls an agreement a health-care resource sharing agreement, it is one, regardless of the terms or purpose of the agreement. Examples of these mis-titled health-care resource sharing agreements include leases that allow significant portions of DVAs West Los Angeles Campus (WLA Campus) to be used as: a private schools athletic complex; a luxury hotels laundry service; a movie studios set storage facility; and a baseball stadium for UCLA. These uses deny veterans access to the land and prevent DVA from using the land for purposes that benefit veterans. That, of course, is precisely what Congress sought to avoid by carefully circumscribing DVAs authority. DVAs use of the sharing authority in this manner is contrary to the plain meaning of the health-care resource sharing statute. If permitted, moreover, it would render obsolete Congresss separate grant to DVA of Enhanced Use Lease (EUL) authority, which expressly empowered the agency to lease its property to third parties for commercial purposes unrelated to services for veterans if the revenue generated will improve veteran services. Indeed, DVAs use of its sharing authority at the WLA -1MEM. OF P. & A. IN SUPP. OF PLS. MOT. FOR SUMM. J.

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Campus makes a mockery of the comprehensive statutory framework Congress enacted to regulate use of DVA land: if Congress had intended the health-care resource sharing statute to authorize DVA to lease its property in whatever manner DVA saw fit, the numerous substantive and procedural limitations on DVAs authority to lease its property found throughout Title 38 of the U.S. Code would be meaningless and superfluous. This Court was correct when it stated that the DVAs land-use agreements entered into pursuant to ESAs that do not provide for the sharing of health-care resources were unauthorized and resulted in lost access to space and opportunities that benefit veterans on the WLA Campus. March 16, 2012 Order Granting in Part and Denying in Part Defendants Motion to Dismiss at 11 (Dkt. No. 70) (March 16 Order). Plaintiffs now ask the Court to enter summary judgment that DVAs decisions to enter into commercial land deals on the WLA Campus were made in excess of statutory authority. II. BACKGROUND A. Statutory Framework Governing the Challenged Leases

In Title 38 of the U.S. Code, Congress specifies the manner in which DVA may operate and dispose of property within its control. Congress authorizes three principal types of agreements through which DVA may use or dispose of its properties: (1) health-care resource sharing agreements (referred to by DVA as Enhanced Sharing Agreements ESAs), 38 U.S.C. 8151-53; (2) EULs, 38 U.S.C. 8161-69; and (3) short-term outleases (which are not at issue in this case). Thus, Congress expressly provided that health-care resource sharing agreements and EULs are different types of agreements. Additionally, Congress has specifically limited DVAs power to operate and dispose of the WLA Campus by expressly barring the use of EULs on that property. See id. 8162(c)(1).

-2MEM. OF P. & A. IN SUPP. OF PLS. MOT. FOR SUMM. J.

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1.

Health-Care Resource Sharing Authority

The current scope of DVAs sharing authority took shape in 1996, when Congress enacted legislation to enhance DVAs sharing authority under 38 U.S.C. 8151-8153 by eliminating prior formulations that limited that authority to specialty medical services and to agreements between DVA and specified medical providers. Section 8151, entitled Statement of congressional purpose, provides: It is the purpose of this subchapter to strengthen the medical programs at Department facilities and improve the quality of health care provided veterans under this title by authorizing the Secretary to enter into agreements with health-care providers in order to share health-care resources with, and receive health-care resources from, such providers while ensuring no diminution of services to veterans. 38 U.S.C. 8151 (emphasis added). Section 8152 defines the terms used in 38 U.S.C. 8151-8153 and provides, in relevant part: The term health-care resource includes hospital care and medical services (as those terms are defined in section 1701 of this title), services under sections 1782 and 1783 of this title, any other health-care service, and any health-care support or administrative resource. 38 U.S.C. 8152.1 Thus, by statute, Congress has specifically defined health-care resources, consistent with its plain meaning and common usage, to include such things as hospital care and medical services for veterans and their families.

38 U.S.C. 1701(5) defines hospital care as including such services as medical services rendered in the course of the hospitalization of any veteran, and mental health services . . . and training for the members of the immediate family of a veteran to assist with the veterans rehabilitation. 38 U.S.C. 1701(6) defines medical services as including surgical, dental, optometric, podiatric, preventative health, and other such services. 38 U.S.C. 1782 provides for counseling, training, and mental health services for immediate family members and caregivers of veterans, and 38 U.S.C. 1783 provides for bereavement counseling. -3MEM. OF P. & A. IN SUPP. OF PLS. MOT. FOR SUMM. J.

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Section 8153, entitled Sharing of health-care resources, provides, in relevant

To secure health-care resources which otherwise might not be feasibly available, or to effectively utilize certain other healthcare resources, the Secretary may, when the Secretary determines it to be in the best interest of the prevailing standards of the Department medical care program, make arrangements, by contract or other form of agreement for the mutual use, or exchange of use, of health-care resources between Department health-care facilities and any health-care provider, or other entity or individual. 38 U.S.C. 8153(a)(1). 2. Enhanced Use Lease Authority

At the time DVA entered into the challenged leases, it was authorized to lease DVA land through an EUL if the Secretary determined that (1) at least part of the property under the lease will be to provide appropriate space for an activity contributing to the mission of DVA; (2) the lease will not be inconsistent with and will not adversely affect the mission of DVA; and (3) the lease will enhance the use of the property . . . . Veterans Millennium Health Care and Benefits Act, Pub. L. No. 106-117, Title II, 208(a), (b), 113 Stat. 1567 (1999) (former 38 U.S.C. 8162(a)(2)(A)(i)-(iii), repealed 2012). Alternatively, DVA could enter into an EUL if applying the consideration under such a lease to the provision of medical care and services would result in a demonstrable improvement of services to eligible veterans in the geographic service-delivery area within which the property is located. Id. (former 38 U.S.C. 8162(a)(2)(B), repealed 2012). In either case, [f]unds received by the Department under an enhanced-use lease had to be deposited in the Department of Veterans Affairs Medical Care Collections Fund. 38 U.S.C. 8165(a)(1). The EUL provisions, which do not limit uses under an agreement to -4MEM. OF P. & A. IN SUPP. OF PLS. MOT. FOR SUMM. J.

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health-care resources, protect veterans interests by imposing substantial procedural requirements, including notice-and-comment requirements, which are not required under the health-care resource sharing authority. Compare 38 U.S.C. 8163 with id. 8151-53. These provisions remained largely unchanged until well into the pendency of this litigation, when Congress enacted the Honoring Americas Veterans and Caring for Camp LeJeune Families Act of 2012 (Pub. L. No. 112-154, 126 Stat. 1165 (2012)), substantially modifying the EUL authority. Although the notice-andcomment and other procedural requirements in 38 U.S.C. 8163 remain unchanged, section 211(b) amended 38 U.S.C. 8162(a)(2) to provide that EULs are now authorized only for the provision of supportive housing. Thus, EULs are now authorized only for the purpose of providing supportive housing to homeless veterans, but they remain subject to the notice-and-comment and robust reporting and oversight requirements that have always applied to EULs. 3. Restrictions on Disposition of the WLA Campus

Congress has repeatedly recognized that the WLA Campus is a unique property within the collection of properties managed by DVA. It was donated to the government for the express purpose of benefiting veterans, and, when Congress enacted the EUL authority in 1991, it expressly prohibited the use of EULs on a portion of the WLA Campus. See Veterans Benefits Programs Improvement Act of 1991, Pub. L. No. 102-86, 401(a), 105 Stat. 417 (1991). In 2008, Congress amended 8162 to prohibit DVA from entering into EULs on any portion of the WLA Campus. See Consolidated Appropriations Act, 2008, Pub L. No. 110-161, 224(c), 121 Stat. 2272 (2007). B. The Administrative Record

The administrative record (AR or the Record) produced by Defendants is said to contain all of the material considered, directly or indirectly, in deciding to enter into the agreements that are the subject of Plaintiffs APA claim. April 10, -5MEM. OF P. & A. IN SUPP. OF PLS. MOT. FOR SUMM. J.

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2013 Declaration of Ralph Tillman 3 (Dkt. No. 115-1).2 A review of the Record reveals that, despite the statutory framework cabining DVAs ability to enter into agreements encumbering the WLA Campus, DVA has interpreted 8153 to authorize it to enter into a series of so-called ESAs, through which DVA has diverted a substantial portion of the WLA Campus to uses that are unrelated to the provision of health care. The Record begins with Selected Legal Authorities, including portions of the health-care resource sharing authority (AR 1-6), one federal regulation, 38 C.F.R. 17.142 (AR 7), two statutes relating to the WLA Campus and its Master Plan (AR 89), and excerpts from the Federal Register relating to the Master Plan (AR 10-14). The next section, entitled, Agency Guidance, includes various non-binding instructions developed by DVA concerning exercise of the health-care resource sharing authority (AR 16-88). This is followed by annual reports to Congress on DVAs use of the health-care resource sharing authority (AR 89-140), one memorandum relating to compensated work therapy (AR 141-146), one legal memorandum relating to Statutory Land Restrictions on the WLA Campus (AR 147-150), excerpts from the Master Plan (AR 151-89), and documents related to specific ESAs that encumber the WLA Campus (AR 190-1700). The Record includes documents indicating the following ESAs or related arrangements:

Defendants filed the initial version of the Record, numbered 1-1046, on October 22, 2012. (Dkt. No. 96.) Defendants then voluntarily supplemented the Record on November 20, 2012 (one day before the filing of Plaintiffs Motion to Supplement the Record [Dkt. No.100]) with a collection of documents numbered 116.001-116.139, 413.001-413.073, 790.001-128, and 1010.001-1010.175. (Dkt. No. 98.) In response to this Courts order requiring further supplementation of the Record (Dkt. No. 108), on February 19, 2013 Defendants added documents numbered 878, 881.1-881.5, 894.1-894.61, 1010, 1041.1, 1046-1700. (Dkt. No. 112.) Finally, Defendants voluntarily supplemented the Record again on April 10, 2013 with documents numbered 246.1-246.28. (Dkt. No. 115.) Hereinafter all cites to the administrative record will begin with AR and be followed by the page numbers applied by the Defendants. -6MEM. OF P. & A. IN SUPP. OF PLS. MOT. FOR SUMM. J.

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ESA Name

AR

Description ESA with private school so the school could build and operate athletic facilities on the WLA Campus for use by the school ESA with non-profit to manage garden located on the WLA Campus and the Compensated Work Therapy program associated with the garden ESA with corporation to operate the laundry facility on the WLA Campus to serve hotels and other businesses in the surrounding area ESA with university so the university could build and operate a baseball stadium on the WLA Campus for use by its intercollegiate baseball team ESA with non-profit to operate transitional and emergency housing programs in a building on the WLA Campus ESA with non-profit to operate transitional and emergency housing programs in a building on the WLA Campus ESA with corporation to use building on the WLA Campus to store film and other equipment ESA with non-profit to manage golf course located on the WLA Campus and the Compensated Work Therapy program associated with the golf course ESA with non-profit to create a park on the WLA Campus used for private events and other purposes ESA with private club to utilize athletic facilities and parking on the WLA Campus for soccer practice and games ESA with corporation to manage and operate parking lots on the WLA Campus ESA with corporation to operate a farmers market on the WLA Campus ESA with corporation to manage and operate theaters on the WLA Campus for theatrical and musical productions open to the public and for private events Eleven (11) ESAs with production companies to film movies, television shows, and advertisements on the WLA Campus Agreement with the City of Los Angeles to operate, rent-free, a city park and parking on the WLA Campus -7-

Brentwood School 191-290 Rancho Santa Ana 291-331 Botanical Garden Sodexho Marriot Laundry Services UC Regents Salvation Army Building 212 Salvation Army Building 207 332-381 382-446 447-521 522-611

Twentieth Century 612-667 Fox Television US Vets Initiative Veterans Park Conservancy 668-823 824-876

Westside Breakers 877-917 Soccer Club Westside Services TMC LLC Richmark Entertainment Filming Agreements Barrington Park 918-1055 1056-1084 1085-1316

1317-1699 1689-1700

MEM. OF P. & A. IN SUPP. OF PLS. MOT. FOR SUMM. J.

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The agreements listed above, excepting the agreements with the Salvation Army, US Vets Initiative, and Rancho Santa Ana Botanical Garden,3 are the challenged leases. The challenged leases encumber and impair veterans access to and use of 90.39 of the 388-acres WLA Campus, nearly a quarter of the campus. C. Plaintiffs APA Claim

Plaintiffs move for summary judgment in their favor on the ground that the challenged leases violate the Administrative Procedure Act (APA) and are therefore void, because they constitute final agency action in excess of DVAs authority or otherwise contrary to law. 5 U.S.C. 706(2)(A) & (C). The Record reveals that DVA relied on its health-care sharing authority under 38 U.S.C. 815153 to justify the challenged leases. This sharing authority allows DVA to encumber the WLA Campus, but only via agreements that are for . . . the mutual use, or exchange of use, of health-care resources. Id. at 8153 (emphasis added). The challenged leases have nothing to do with health-care resources, so Plaintiffs now ask the Court to void the challenged leases and enjoin future misuse of DVAs authority to share health-care resources.4 III. LEGAL STANDARD The APA, 5 U.S.C. 701-708, governs judicial review of agency action. See Wilderness Socy v. U.S. Fish & Wildlife Serv., 353 F.3d 1051, 1059 (9th Cir. 2003) (en banc), amended on rehg en banc on other grounds, 360 F.3d 1374 (9th Cir. 2004). Under the APA, courts may set aside agency action if the agency decision is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law, 5 U.S.C. 706(2)(A), or in excess of statutory jurisdiction, authority, or
3

Plaintiffs counsel advised counsel for Defendants that Plaintiffs were not challenging these agreements during the meet-and-confer process under Local Rule 7-3. 4 As the Court has also previously held, Plaintiffs have standing to bring this claim because Plaintiffs have suffered injury, see March 16 Order at 12, and the Court can redress the injury by declaring the challenged leases unlawful, see id. at 14. The factual allegations on which the Courts holding rests have been establish by declarations in the record. Dkt. Nos. 64-66. -8MEM. OF P. & A. IN SUPP. OF PLS. MOT. FOR SUMM. J.

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limitations, or short of statutory right, id. 706(2)(C). Plaintiffs APA claim turns on whether DVA was authorized to enter into the challenged leases under 38 U.S.C. 8151-53, and the claim is therefore governed by Chevron U.S.A. Inc. v. Natural Resources Defense Council, 467 U.S. 837, 104 S. Ct. 2778, 81 L. Ed. 2d 694 (1984). In Chevron, the Supreme Court set forth a two-step test for judicial review of administrative-agency interpretations of federal law. Under the first step: If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. Wilderness Socy, 353 F.3d at 1059 (quoting Chevron, 467 U.S. at 842-43). Congressional intent may be determined by traditional tools of statutory construction, and if a court using these tools ascertains that Congress had a clear intent on the question at issue, that intent must be given effect as law. Id. (quoting Chevron, 467 U.S. at 843 n.9). If a court concludes that the statute is silent or ambiguous with respect to the issue at hand, it proceeds to the second step under Chevron, which involves analyzing the agencys interpretation of the statute. Id. [W]hen it appears that Congress delegated authority to the agency generally to make rules carrying the force of law, and that the agency interpretation claiming deference was promulgated in the exercise of that authority, id. (quoting United States v. Mead Corp., 533 U.S. 218, 226-27, 121 S. Ct. 2164, 150 L. Ed. 2d 292 (2001)) (emphasis in original), the court must defer to the agency so long as the agencys answer is based on a permissible construction of the statute, id. (quoting Chevron, 467 U.S. at 843). For administrative decisions that do not meet these standards, the agencys interpretation is entitled not to deference, but to a lesser respect based on the persuasiveness of the agency decision. Id. at 1067 (quoting Mead, 533 U.S. at 228). IV. ARGUMENT The central issue in this case is whether the challenged leases fall within DVAs power to shar[e] health-care resources. They do not. DVAs decisions to -9MEM. OF P. & A. IN SUPP. OF PLS. MOT. FOR SUMM. J.

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enter into the challenged leases exceeded its statutory authority and were therefore unlawful. DVA may enter into sharing agreements under 38 U.S.C. 8151-53 only if they relate to the provision of health-care services to veterans, and the challenged leases have nothing to do with providing health care to veterans. See March 16 Order at 11 (finding that the land use statutes make it clear that Congresss intention was to ensure that property leased to third parties is primarily used to benefit veterans). Because Congresss intent that ESAs must involve the sharing of health-care resources is clear from the statutory text, that is the end of the matter, Wilderness Socy, 353 F.3d at 1059 (quoting Chevron, 467 U.S. at 842), and DVAs decisions to enter into the challenged leases, which have nothing to do with health-care resources, should be set aside. See 5 U.S.C. 706(2)(A)&(C). Even assuming, for the sake of argument, that the health-care resource sharing statute is ambiguous, DVAs decisions are not entitled to any deference because they were not made in the exercise of delegated authority to make rules carrying the force of law, and the Record contains no supportother than bald assertions with no supporting legal analysisfor DVAs position that 38 U.S.C. 8153 authorizes it to enter into any agreement with any entity for any purpose. Accordingly, the Court should resolve the ambiguity through normal means of statutory construction, and the only reasonable reading of the statute is that the agreements must relate to provision of health care. A. The Challenged Leases Are Void Because They Exceed Unambiguous Limits on DVAs Power To Share Health-Care Resources

The scope of DVAs power to share health-care resources is unambiguous. Simply put, DVA may arrange for DVA and a third party to mutually use or exchange the use of resources related to the provision of health care. DVA may not enter into traditional commercial leases, which dispose of land otherwise dedicated for the direct benefit of veterans in exchange for rent. Thus, the challenged leases plainly exceed the scope of DVAs authority and must be voided. - 10 MEM. OF P. & A. IN SUPP. OF PLS. MOT. FOR SUMM. J.

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1.

Congress Has Unambiguously Defined the Phrase HealthCare Resource

Congress granted DVA authority to share health-care resources but went to great pains to set an outer boundary to that authority, providing clear and unambiguous instructions as to what types of resources DVA may share. Specifically, Congress made clear that, although DVA has considerable discretion to decide whether and when to share health-care resources, that discretion extends only to agreements that are related to provision of health care. The plain text and statutory structure convey that Congress did not intend to give DVA blanket discretion to enter into any lease with any entity for any purpose, including commercial enterprises wholly unrelated to the provision of health care, so long as the lease generated revenue for DVA. See Wilson v. C.I.R., 705 F.3d 980, 987-88 (9th Cir. 2013) (The first step in statutory construction is examining the language of the specific provision at issue, as well as the structure of the statute as a whole, including its object and policy. (internal quotation marks omitted)). Congress explicitly stated that it authorized DVA to enter into health-care resource sharing agreements to strengthen the medical programs at Department facilities and improve the quality of health care provided veterans through agreements with health-care providers in order to share health-care resources with, and receive health-care resources from, such providers while ensuring no diminution of services to veteran. 38 U.S.C. 8151 (emphasis added). Congress then proceeded to define the health-care resources that DVA is authorized to share, leaving no doubt that the kind of resource that can be shared is, as plain usage (and common sense) would suggest, a resource related to the provision of health care: The term health-care resource includes hospital care and medical services (as those terms are defined in section 1701 of this title), services under sections 1782 and 1783 of this title, any other health-care service, and any health-care support or administrative resource. 38 U.S.C. 8152(1). Hospital care and medical care are, thus, examples of resources that constitute a health-care resource, and they are - 11 MEM. OF P. & A. IN SUPP. OF PLS. MOT. FOR SUMM. J.

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defined consistent with their plain meaning. Hospital care includes prototypical aspects of health care like medical services rendered in the course of the hospitalization and mental health services, 38 U.S.C. 1701(5), as does medical services, which includes medical examination, treatment, and rehabilitative services, 38 U.S.C. 1701(6). The other cross-references in the definition are to provisions that address family mental health counseling and training, 38 U.S.C. 1782, and bereavement counseling, 38 U.S.C. 1783, both of which are related to care and treatment of veterans. Both support and administrative resources can be healthcare resources only if they are health-care support or administrative resources and thus relate to hospital care or medical services, e.g., a health-care support resource could be a laundry facility that is used to wash bedding used in a hospital, while a health-care administrative resource could be a digital filing system for medical records. For resources to be health-care resources, they must be of the same kind as hospital care, medical care, health-care service, and related health-care support and administrative resources. See United States v. Lacy, 119 F.3d 742, 748 (9th Cir.1997) (holding that, under the canon of statutory construction ejusdem generis, a general term following more specific terms means that the things embraced in the general term are of the same kind as those denoted by the specific terms). All of the terms included in the definition thus relate exclusively to physical and mental healthcare or rehabilitation services for veterans and their relatives. Congress then authorized the Secretary to make arrangements . . . for the mutual use, or exchange of use, of health-care resources between Department health-care facilities and any health-care provider, or other entity or individual. 38 U.S.C. 8153(a). Congress thus limited DVAs authority under 8153(a) to agreements involving health-care resources, as defined in 8152(1).5 The plain language,
5

Section 8153(a)(3) sets forth special procedures for acquir[ing] certain health-care resources, including a commercial service, the use of medical equipment or space, or research, 38 U.S.C. 8153(a)(3)(A), and authorizes the Secretary to establish special procedures that are subject to public comment when DVA intends to procure the health-care resources from certain entities, 38 U.S.C. 8153(a)(3)(B)(ii). Although (Footnote Contd on Following Page) - 12 MEM. OF P. & A. IN SUPP. OF PLS. MOT. FOR SUMM. J.

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structure, and articulated purpose of the health-care resource sharing statute thus make clear that Congress intended that such agreements would involve only resources that are directly related to providing health care and treatment to veterans and did not intend to authorize DVA to encumber DVA resources by entering into purely commercial land deals that have nothing at all to do with the provision of such care to veterans. 2. Reading 8153 to Authorize the Challenged Leases Would Be Inconsistent with the Broader Statutory Structure Regulating Use of DVA Property

A contrary reading of 8153 would also be inconsistent with the overall statutory framework that Congress has created for DVAs management of DVA land generally and the WLA Campus specifically. Congress included a provision in the EUL statute that explicitly authorized commercial land deals that do not directly relate to providing health care if DVA determines that the revenue generated will support DVAs broader mission of providing care to veterans. See Veterans Millennium Health Care and Benefits Act, Pub. L. No. 106-117, Title II, 208(a), (b), 113 Stat. 1567 (1999) (former 38 U.S.C. 8162(a)(2)(B)) (authorizing EUL if applying the consideration under such a lease to the provision of medical care and services would result in a demonstrable improvement of services to eligible veterans in the geographic service-delivery area). Reading 8153 to authorize DVA to enter into the challenged leases would require an assumption that Congress intended to create two distinct processes through which the agency can accomplish exactly the same endentering into a purely commercial land deal that provides no direct health-care benefit to veterans but raises revenue for the agencybut included explicit authorization, and imposed specific procedural and substantive conditions, with respect to only one of the two.
(Footnote Contd From Previous Page)

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this provision does not apply here because none of the challenged leases involve the acquisition of health-care resources, the references to commercial service, medical equipment and space, and research in subsection (a)(3)(A) establish that they may qualify as a health-care support or administrative resource, 38 U.S.C. 8152(1). As with other such support or administrative resources, however, they satisfy the definition of health-care resources only if they are health-care support or administrative resources, i.e., related to the provision of health care. - 13 MEM. OF P. & A. IN SUPP. OF PLS. MOT. FOR SUMM. J.

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Moreover, if 38 U.S.C. 8153 is read to authorize DVA to enter into whatever land deals it desires simply because the revenue supports DVAs operations, the EUL statute would be superfluous: There is no reason why DVA would ever choose to use the EUL authority, with its notice-and-comment requirement, strict limitations on how revenue generated by a lease can be used, and specific and onerous standards for approving an agreement, if it could circumvent all of those requirements simply by entering into the same agreement, calling it a health-care resource sharing agreement, and citing 8153. The EUL statute demonstrates that Congress knew how to specifically authorize DVA to enter into commercial leases for revenue-generating purposes and that it did so in a manner that is inconsistent with reading its separate authorization of health-care resource sharing agreements to cover such purely commercial leases. See, e.g., United States v. Wahid, 614 F.3d 1009, 1014 (9th Cir. 2010) ([W]e abide by the principle that where Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion. (internal quotation marks omitted)). In fact, the comprehensive statutory scheme that Congress enacted regulating DVAs ability to lease its property to third parties would be completely undermined if 8153 were read as a blanket delegation of authority to lease its property however it sees fit. Part VI of Title 38 is entitled Acquisition and Disposition of Property, and every other provision in Part VI related to disposition of property would be meaningless if 8153 were read to authorize DVA to enter into the challenged leases. Reading 8153 to authorize the challenged leases would subvert that clear congressional intent and must therefore be rejected. 3. Legislative History Confirms that the Challenged Leases Are Contrary to Congresss Intent

Although resort to legislative history is unnecessary because the plain language and structure of the statute unambiguously establish Congresss intent, the legislative - 14 MEM. OF P. & A. IN SUPP. OF PLS. MOT. FOR SUMM. J.

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history of both 38 U.S.C. 8151-53 and 8161-69 confirm that Congress did not intend to authorize DVA to enter into purely commercial land deals through 8153. See Wilson, 705 F.3d at 988 (holding that courts may look to legislative history to confirm congressional intent). In 2007, Congress stripped DVA of any power to enter into EULs covering the WLA Campus. See Pub. L. No. 110-161, 224(a). Prior to that, the EUL power explicitly authorized DVA to lease certain portions of the WLA Campus for uses unrelated to providing health-care to veterans in exchange for rent and use the rents to fund its activities. If 8153 authorized DVA to enter into exactly the same sort of agreements, as health-care resource sharing agreements, then stripping DVA of its power to enter into EULs on the WLA Campus would have been a meaningless act. See Boise Cascade Corp. v. U.S. E.P.A., 942 F.2d 1427, 1432 (9th Cir. 1991) (Under accepted canons of statutory interpretation, we must interpret statutes as a whole, giving effect to each word and making every effort not to interpret a provision in a manner that renders other provisions of the same statute inconsistent, meaningless or superfluous.). Moreover, just last year, Congress overhauled the EUL authority, removing the only explicit authorization in Title 38 for DVA to enter into purely commercial leases to generate general revenue for DVA (former 8162(a)(2)(B)) and replacing it with a requirement that EULs may be used only for the purpose of providing supportive housing for homeless veterans. Pub. L. No. 112-154, 211(b). Again, this demonstrates that Congress knew both how to authorize DVA to lease underutilized property for purposes unrelated to veteran health-care to generate additional operating revenue and how to repeal that authority. This underscores even further that reading 8153 to authorize any and all leases of DVA property would undermine clear congressional intent, as revealed through the structure and history of the relevant statutory scheme. Likewise, the legislative history of the 1996 amendments to 8151-53 confirms that Congress intended that any agreements made under 8153 must relate directly to health care for veterans. Prior to the 1996 amendment, Congress had - 15 MEM. OF P. & A. IN SUPP. OF PLS. MOT. FOR SUMM. J.

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authorized DVA to share specialized medical resources only with other healthcare facilities, . . . research centers, or medical schools and health-care resources only with state home facilities. Priority VA Health Care For Persian Gulf Veterans, Pub. L. No. 103-210, 3(a), 107 Stat. 2497 (1993). Eventually, Congress recognized that those limits on the sharing authority unwisely prohibited DVA from benefiting from sharing resources that support its provision of health care, such as various risk assessment, accounting, or other nonmedical services, or joint efforts with other health-care providers, such as health maintenance organizations, insurance carriers, individual physicians, or other individual care providers. S. Rep. 104-372 at 21 (1996). The 1996 amendments were intended to ease these various restrictions by authorizing VA to enter into agreements with any non-VA health care provider for the mutual use or exchange of use of any health care resources. Id. (emphasis added). The 1996 amendments authorized DVA to share all health-care resources (and, as noted above, Congress included a comprehensive definition of that term in the statute) and to do so without limiting who may share in those resources, and they made no mention of purely commercial leases wholly unrelated to the provision of health care. Thus, the legislative history supports the conclusion that the 1996 amendments were intended, as the plain language of the statute makes clear, to greatly expand DVAs authority to enter into agreements related to the provision of health care, but not to otherwise expand DVAs authority to enter into commercial leases wholly unrelated to the provision of health care to veterans. 4. The Challenged Leases Exceed DVAs Authority to Share Health-Care Resources

The challenged leases have nothing to do with the sharing of health-care resources. Rather, they are purely commercial leases involving land or buildings that happen to be owned by DVA. Accordingly, DVAs decisions to enter into the challenged leases are outside DVAs statutory authority and must be set aside. - 16 MEM. OF P. & A. IN SUPP. OF PLS. MOT. FOR SUMM. J.

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Brentwood School. DVA entered an agreement with the Brentwood School under which the school has the right to develop and use a 20-acre parcel of the WLA Campus as an athletic complex for the school. AR 248-79. The agreement expressly provides that the area shall be fenced at the perimeter to prevent unauthorized use. AR 255. The Brentwood School is entitled to use the facility for any school-related or school-sponsored purpose or function. Id. DVA has no absolute right to enter or use the area except for the purpose of inspection or protection of the interests of the DVA, and DVA can request permission to use the facility only at mutually convenient times to be agreed upon in advance. AR 256. The agreement, thus, generally excludes veterans from 20-acres of land on the WLA Campus for the benefit of the Brentwood School, its students, and their families. Neither the agreement nor the supporting documents articulate any health-care resource on the property, let alone any benefit to veterans, who, in the absence of the ESA, would have had unfettered access to the land. Sodexho Marriot Laundry Services. DVA entered an agreement for use of Building 224 for processing hospitality linen. AR 341-66. After the original term of the agreement expired, Sodexho continued its use of the buildings under a series of extensions, for which the record does not reflect a termination date. AR 374-78. Sodexho may operate the facility 24 hours a day, 7 days a week and shall lock the building and provide a master to DVA security. AR 346. The agreement does not provide for the mutual use or exchange of use of the laundry facilities between Sodexho and DVA, i.e., there is no requirement that DVA laundry be processed, and neither the agreement nor the supporting documents articulate how the agreement involves a health-care resource that would provide any direct benefit to veterans. Indeed, DVAs only explanation of how the agreement would enhance services to veterans was that [i]ncome generated . . . will be used to support WLAVAMC medical care for veterans. AR 334. This agreement is purely a commercial lease with a private corporation that falls outside DVAs power to share health-care resources. - 17 MEM. OF P. & A. IN SUPP. OF PLS. MOT. FOR SUMM. J.

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UC Regents (Baseball Stadium). DVA entered into an agreement with the UC Regents pursuant to 38 U.S.C. 8151-53 for the use of Jackie Robinson Stadium by the UCLA baseball team, which occupies approximately 7.35 acres of the WLA Campus. The May 2001 agreement was for a ten-year term. AR 415-429. The agreement provides that the Regents will have priority use of the stadium for their baseball team, AR 418, and that DVA has the right to use the stadium in the event that the Stadium is not booked, provided it seeks advance notice of its desire to use the stadium, AR 419, although DVA must reimburse the Regents for costs of DVA events at the stadium, AR 419, 425. The agreement, thus, generally excludes veterans from 7.5 acres of land on the WLA Campus for the benefit of the UCLA baseball team and does not relate in any way to the provision of health-care resources to veterans. In a 2008 Memorandum to the Secretary, Under Secretary for Health Michael J. Kussman recommended against approving the renewal of the Jackie Robinson ESA, repeatedly stressing that the agreement has no impact or direct benefit to veteran care. AR 409-411. Although Former Secretary James Peake agreed with this assessment, AR 411, DVA continued to renew the ESA on an ongoing basis following the termination of its initial term in May 2011, AR 430-444. Twentieth Century Fox Television. DVA entered an agreement with Twentieth Century Fox Television for the use and development of a 73,160 square foot parcel of land on the WLA Campus for parking, storage and maintenance of production sets. AR 648-65. The agreement runs through August 2016 and provides for a 10-year renewal option. AR 648, 650. The agreement permits Fox to construct a 40,000 square foot building to house production sets and equipment. AR 614, 649, 660-61. This purely commercial lease does not involve the sharing of health-care resources. Thus, the only benefit that DVA identified before entering the agreement was revenue and the potential for employment opportunities because Fox was interested in employing several veterans as guards for the site, AR 614. However, there is no corresponding - 18 MEM. OF P. & A. IN SUPP. OF PLS. MOT. FOR SUMM. J.

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provision contemplating employment for veterans in the actual, executed ESA, AR 648665. This ESA does not relate to the provision of health care resources for veterans. Veteran Park Conservancy. In 2006, DVA entered into discussions to convert a pre-existing MOU with the non-profit Veterans Park to an agreement under the health-care resource sharing authority. AR 826. In the executed agreement, DVA provides a new entity known as the Veterans Park Conservancy with use of approximately sixteen (16) acres of land . . . on a year round basis for a period of up to 30 years. AR 861-76, 868. In lieu of consideration, DVA apparently expects a gift of capital improvements to exceed $5 million, AR 827, but the Record contains no evidence that such a gift was ever actually made. The agreement itself contains no provisions tying it to the provision of medical or health care resources. AR 861-76. The now-encumbered space would otherwise have been available to veterans for the same purposes without the ESA. Indeed, the ESA serves only to deprive veterans of access to the space throughout the year by providing the resource to a private party. Westside Breakers Soccer Club. DVA entered into an agreement with the Westside Breakers Soccer Club for the use of MacArthur Field and lot #38 on the WLA Campus as a location for soccer practices and matches. AR 895-915. The version of the agreement in the Record reflects a term covering 2010-11, and the Record does not reflect the extent to which an arrangement with the club continues. The agreement identifies significant portions of each day during which the club is entitled to use the field. AR 903. The ESA contains no provisions that benefit veterans, much less involving the provision of health care to veterans. Westside Services. DVA entered into an agreement with Westside Services, LLC for the control and operation of all vehicular parking areas on the WLA Campus. AR 1047-53. The agreement runs for another nine years. AR 1055. The ESAs only apparent purpose is revenue generation from the operation of parking facilities for surrounding businesses, AR 1047, and as-needed parking management for events unrelated to health-care, AR 1059. - 19 MEM. OF P. & A. IN SUPP. OF PLS. MOT. FOR SUMM. J.

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TMC LLC (Farmers Market). The Record indicates that the ESA with TCM, LLC is merely a commercial lease of DVAs land so that TCM could hold a farmers market. AR 1056-84. Indeed, DVAs Memorandum Review document, which formed the basis for the TCM ESA, does not mention the word health care. AR 1064-65. Richmark Entertainment. The resource to be shared under DVAs agreement with Richmark Entertainment is booking services and theatre management services, AR 1145, 1214, for theatrical productions in theatres on the WLA Campus. The agreement is purely commercial in nature and provides no health-care benefit to veterans. In January of 1999, Richmark submitted a proposal to DVA to establish the Wadsworth [theatre on the WLA Campus] as a theatre to house the road companies of many Broadway and Off Broadway shows. AR 1087-1090. DVA ultimately formed an agreement with Richmark to manage the theatre which contained no mention of veterans or health care, describing the agreement as a sound business decision. AR 1091. DVA renewed its contract with Richmark on January 1, 2006, in a sharing agreement that again failed to mention veterans or health care. AR 1208-48. Filming Agreements. The Record contains documents related to eleven separate Filming Agreements on the WLA Campus pursuant to the health-care resource sharing authority. AR 1339-70 (7 Pounds Production), 1385-94 (Warner Bros.), 140431 (NBC Universal), 1452-71 (20th Century Fox Television), 1483-1514 (TNTLeverage), 1523-50 (Amy Weiss), 1564-94 (NBC Universal), 1608-19 (Balance Production), 1630-40 (United Feature Film), 1652-62 (Psychic Bunny) & 1674-84 (Hemisphere Entertainment). None of these agreements have any relationship to provision of health-care for veterans. In fact, among the most popular locations for filming on the WLA Campus are Buildings 205, 208 and 209, see, e.g., AR 1320, 1447, 1531, 1647, which were purportedly set aside by DVA for housing for homeless veterans, AR 11. The Record indicates that no proposed Filming Agreement was ever rejected by DVA. - 20 MEM. OF P. & A. IN SUPP. OF PLS. MOT. FOR SUMM. J.

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Barrington Park. In 1983, the VA entered into a rent-free agreement with the City of Los Angeles under 38 U.S.C. 5022 (now 38 U.S.C. 8122) for 12 acres to be used for public recreational use. AR 1690, 1697. This land ultimately became known as Barrington Park. AR 1699. By an undated letter, DVA noted that the agreement had lapsed in 1994 and proposed that the agreement be renewed as an enhanced sharing agreement, with two possible approaches: (1) the City of Los Angeles paying $300,000.00 per year; or (2) the City of Los Angeles presumably would continue operating the park free of rent, but would have to share revenue generated by the parking lots or operations of the park, or both. AR 1699-1700. The Record contains no evidence that the City responded to the letter or that the ESA was formally executed, although the VA GLA Master Plan indicated that negotiations were suspended. AR 186. Neither the original agreement, nor the undated letter proposing the ESA make any reference to the development or sharing of health-care resources on the property now used as Barrington Park or of any benefits to veterans. B. Even Assuming the ESA Statute is Ambiguous, DVAs Decisions Are Not Due Any Deference

Congresss intent in 8153 is clear, so the agencys interpretation of the statute is irrelevant. See Wilderness Socy, 353 F.3d at 1060. Nonetheless, even assuming for the sake of argument that the health-care resource statute is ambiguous, this Court should not give any weight to DVAs interpretation. As explained in detail in Plaintiffs Opposition to the Governments Motion for Summary Judgment, the decisions to enter into the challenged leases were not made pursuant to a delegation of authority carrying the force of law, so DVAs decisions are not entitled to deference under Chevron. See Pls. Oppn to Defs. Mot. for Summ. J. at 14-15. The informal interpretations contained in the ESAs themselves and the internal DVA policy bulletins in the Record are not due any weight under Mead and Skidmore because they contain no reasoned analysis and are nothing more than conclusory assertions. See id. at 15-17. DVAs interpretation therefore does not warrant any deference, and the only sensible reading of - 21 MEM. OF P. & A. IN SUPP. OF PLS. MOT. FOR SUMM. J.

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the statutethat it authorizes only sharing agreements that are directly related to the provision of health carecontrols. See Wilderness Socy, 353 F.3d at 1069 (discounting agency interpretation under Skidmore because it goes beyond the limits of what is ambiguous and contradicts what in our view is quite clear (quoting Whitman v. Am. Trucking Assn, 531 U.S. 457, 481, 121 S. Ct. 903, 149 L. Ed. 2d 1 (2001))). V. CONCLUSION For the foregoing reasons, Plaintiffs respectfully submit that the Court should grant their motion for summary judgment.

Dated: May 10, 2013.

ARNOLD & PORTER LLP

By:

/s/ John C. Ulin John C. Ulin Attorneys for Plaintiffs

- 22 MEM. OF P. & A. IN SUPP. OF PLS. MOT. FOR SUMM. J.