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Outdoor Amusement Business Association, Inc. v. Department of Homeland Security

United States District Court, D. Maryland

July 27, 2017

OUTDOOR AMUSEMENT BUSINESS ASSOCIATION, INC., Plaintiffs,
v.
DEPARTMENT OF HOMELAND SECURITY, Defendants.

          MEMORANDUM OPINION

          ELLEN LIPTON HOLLANDER UNITED STATES DISTRICT JUDGE.

         This Memorandum Opinion resolves a motion to supplement the administrative record in connection with a suit challenging, inter alia, the authority of two federal departments - the Department of Labor and the Department of Homeland Security - to issue jointly certain regulations pertaining to the H-2B visa program (the "Program"). The Program governs the temporary employment of nonimmigrant aliens.

         Plaintiffs are trade associations whose members rely on the Program to obtain workers, as well as business entities that utilize the Program. Id., ¶¶ 12-17. In particular, they are Outdoor Amusement Business Association, Inc.; Maryland State Showmen's Association, Inc.; The Small and Seasonal Business Legal Center; Lasting Impressions Landscape Contractors, Inc.; Three Seasons Landscape Contracting Services, Inc.; and New Castle Lawn & Landscape, Inc. They have sued the following defendants: the Department of Homeland Security ("DHS"); the United States Citizenship & Immigration Services ("USCIS"), a component agency of DHS; the Department of Labor ("DOL"); the Employment & Training Administration ("ETA"), a component agency of DOL; and the Wage & Hour Division ("WHD"), another component of DOL.

         The Second Amended Complaint (ECF 44, "SAC"), filed on July 5, 2016, is the operative complaint. In the SAC, plaintiffs outline the purpose of the Program, as follows, ECF 44, ¶ 26:

Since 1952, the purpose of the temporary employment H visas, including the H-2B program, has been to alleviate U.S. labor shortages for temporary work and provide nonimmigrant alien labor to fill those temporary or seasonal positions. The H-2B program protects the interests of both U.S. non-agricultural workers and employers, as well as the U.S. economy as a whole, through the preservation of jobs, work opportunities, and employers in the United States. The H-2B program is a legally-authorized source of employees for difficult-to-fill temporary positions, and supports the employment of countless other U.S. workers whose jobs rely on the temporary work performed by foreign workers.

         The SAC, which is over 40 pages in length, contains six counts. In Count I, plaintiffs assert that certain rules and regulations, discussed infra, exceed defendants‘ statutory authority, citing 5 U.S.C. §§ 558 and 706(2)(C). Count II challenges the disputed regulations as arbitrary and capricious, citing 5 U.S.C. § 706(2)(A). In Count III, plaintiffs assert that the regulations are unconstitutional and violate 5 U.S.C. § 706(2)(B). Count IV is titled "Compulsion of Agency Action Unlawfully Withheld." It is predicated on 5 U.S.C. § 706(1). Count V is titled "Mandamus, " pursuant to the Mandamus Act, 28 U.S.C. § 1361, and the All Writs Act, 28 U.S.C. § 1651. Finally, Count VI seeks a declaratory judgment, pursuant to the Declaratory Judgment Act, 28 U.S.C. § 2201.

         Defendants submitted notice of the filing of the administrative record, which consists of almost 3, 800 pages. ECF 46.[1] Thereafter, defendants filed a "Notice of Filing of Corrected Certified Index" (ECF 53), containing three corrections. Plaintiffs subsequently filed a "Motion To Strike And Correct Record Certification, Motion To Complete And Supplement The Record, And Motion For Discovery" (ECF 60), supported by an amended memorandum of law (ECF 61- 1) (collectively, "Motion" or "Motion to Supplement"), and numerous exhibits. ECF 60-2 to ECF 60-19; ECF 61-2; ECF 61-4.[2] Defendants oppose the Motion (ECF 69, "Opposition"), supported by exhibits, docketed collectively at ECF 69-1. Plaintiffs have replied (ECF 73, "Reply"), supported by an exhibit. ECF 70-1.[3]

         No hearing is necessary to resolve the Motion to Supplement. See Local Rule 105.6. For the reasons that follow, I shall grant the Motion in part and deny it in part.

         I. Factual and Procedural Summary[4]

         A. H-2B Visa Program

         In 1952, as part of the Immigration and Nationality Act ("INA"), 8 U.S.C. § 1101 et seq., "Congress created the nonimmigrant H-2 visa category for temporary agricultural and non-agricultural employment that did not require advanced education, skills, or training." ECF 44, ¶ 25. Thereafter, the Immigration Reform and Control Act of 1986 "redesignated the extant H-2 classification as the nonagricultural H-2B visa category, and moved agricultural labor into a newly-created H-2A category." Id. The H-2B visa program permits U.S. employers to recruit and hire foreign workers to fill temporary unskilled, non-agricultural positions for which domestic workers cannot be located. See 8 U.S.C. § 1101(a)(15)(H)(ii)(b); La. Forestry Ass'n, Inc. v. Sec'y of Labor, 745 F.3d 653, 658 (3d Cir. 2014).

         An H-2B employee is defined as a nonimmigrant alien "having a residence in a foreign country which he has no intention of abandoning who is coming temporarily to the United States to perform other temporary service or labor if unemployed persons capable of performing such service or labor cannot be found in this country…." 8 U.S.C. § 1101 (a)(15)(H)(ii)(b). The INA charges DHS with determining, "upon petition of the importing employer, " whether to grant an H-2B visa "after consultation with appropriate agencies of Government." 8 U.S.C. § 1184(c)(1); see also ECF 46, ¶ 28.

         Pursuant to certain DHS labor certification regulations, issued in 2008, DHS asked DOL to determine whether (1) qualified workers in the United States are available to fill an employer‘s job and whether (2) the alien‘s employment will adversely affect wages and working conditions of similarly employed U.S. workers. 8 C.F.R. § 214.2(h)(6)(iii)(A). If, after reviewing an employer‘s job offer and recruitment efforts, the Secretary of Labor determines that U.S. workers are not available to fill the jobs described in the employer‘s application and that the offered terms of work will not adversely affect similarly employed U.S. workers, DOL issues a "temporary labor certification" that the employer must attach to the H-2B visa petition it submits to DHS. 8 C.F.R. §§ 214.2(h)(6)(iii)(C) and 214.2(h)(6)(iv)(A). No petition for H-2B visas may be issued by DHS without an approved labor certification from DOL. Id.

         On April 29, 2015, DHS and DOL jointly issued revised H-2B regulations: the Temporary Non-Agricultural Employment of H-2B Aliens in the United States, 80 Fed. Reg. 24, 042 (Apr. 29, 2015) ("Interim Final Rule"), and the Wage Methodology for the Temporary Non-Agricultural Employment H-2B Program, 80 Fed. Reg. 24, 146 (Apr. 29, 2015) ("Final Rule"). ECF 44, ¶ 2. Collectively, I shall refer to these rules as the "2015 Rules." Both the Interim Final Rule and the Final Rule are in effect.[5]

         The 2015 Rules replace the prior H-2B regulations published on December 19, 2008, at 73 Fed. Reg. 78, 020 ("2008 Final Rule"). The 2008 Final Rule was regarded as "vulnerable to challenges by employers in current and future enforcement proceedings based on the ground that the regulations…are void because DOL exceeded its statutory authority in unilaterally issuing the 2008 rule." See 80 Fed. Reg. at 24, 048-49. Among other things, various provisions of the 2008 Final Rule were invalidated by the United States District Court for the Eastern District of Pennsylvania in Comité de Apoyo a los Trabajadores Agrícolas v. Solis, No. 09-240, 2010 WL 3431761 (E.D. Pa. Aug. 30, 2010). See 80 Fed. Reg. at 24, 046.

         Plaintiffs contend that DHS and DOL violated the INA and the Administrative Procedure Act ("APA"), codified in various sections of 5 U.S.C., as well as the United States Constitution, by jointly issuing certain regulations with respect to the Program. ECF 44, ¶ 4; see also SAC Count I (id, ¶ 94) and Count III (id, ¶ 96). In particular, plaintiffs contend that DHS has impermissibly "redelegate[d]" its rulemaking authority to DOL by, inter alia, allowing DOL to undertake the initial review of the visa program applications. Id., ¶ 4; see also id, ¶ 35. Further, plaintiffs allege that, even if DHS has authority to structure the Program as it has, including by designating DOL as a consultant and relying on DOL‘s expertise, the challenged rules are an unreasonable exercise of that authority (Counts I-II of SAC). Id., ¶¶ 94-95.

         Plaintiffs contest the Interim Final Rule and the Final Rule. The rules establish "the process by which employers obtain a temporary labor certification from DOL for use in petitioning DHS to employ a[n H-2B] nonimmigrant worker, " 80 Fed. Reg. at 24, 042; "the methodology by which DOL calculates the prevailing wages to be paid to H-2B workers and U.S. workers recruited in connection with application for temporary labor certification, " id. at 24, 146; and "enforcement procedures and remedies pursuant to DHS‘s delegation of enforcement authority to DOL." Id. at 24, 046.

         Specifically, the Interim Final Rule "expands the ability of U.S. workers to become aware of the job opportunities in question and to apply for opportunities in which they are interested" and "requir[es] that U.S. workers in corresponding employment receive the same wages and benefits as the H-2B workers." See 80 Fed. Reg. at 24, 043. The regulations also provide additional protections to H-2B workers (such as guaranteed minimum hours and reimbursements for visa and transportation expenses) and to whistleblowers. See Id. The Final Rule "set[s] the methodology by which DOL calculates the prevailing wages to be paid to H-2B workers and U.S. workers recruited in connection with applications for temporary labor certification." See 80 Fed. Reg. at 24146.[6]

         In addition, plaintiffs challenge certain DHS regulations, "collectively referred to and identified …as DHS's Labor-Certification Regulations." ECF 44, ¶ 2; see also id., ¶ 34; 8 C.F.R. § 214.2(h)(6). The Labor-Certification Regulations, issued in 2008, "govern DHS‘s administration of the H-2B program generally, including DOL‘s role in the program." ECF 69 at 11.

         According to plaintiffs, the regulatory scheme is "unworkable" (ECF 44, ¶ 8) and causes unnecessary delay in visa processing. They assert that "H-2B workers are now arriving weeks, and often months, after employers‘ dates of need, " which has harmed plaintiffs and/or their members‘ businesses. Id., ¶ 8. Therefore, plaintiffs ask the Court to enter an Order "enjoining the Defendants nationwide from implementing the unlawful" Interim Final Rule, the Final Rule, and the Labor-Certification Regulations. Id., ¶ 115.[7]

         B. Procedural Background

         Defendants filed the administrate record on August 19, 2016. ECF 46. The original certification accompanying the administrative record was signed by William W. Thompson II, the Acting Administrator of DOL‘s Office of Foreign Labor Certification ("OFLC"). ECF 69-1 at 68. Mr. Thompson "certif[ied] that the index…lists all non-privileged documents that constitute the administrative record underlying" the 2015 Rules. Id. The index accompanying the record lists 18 entries dated between 2011 and 2015. Id. at 66-67.

         The administrative record consists of 3, 769 pages. It includes, among other things, the 2015 Federal Register notices adopting the Interim Final Rule; the 2011 H-2B Notice of Proposed Rulemaking ("NPRM"); all timely, non-duplicative comments received in response to the 2011 H-2B NPRM, because the 2015 Interim Final Rule was adopted after considering all the comments received as to the 2011 H-2B NPRM, see 80 FR 24043, id. at 24049; and the 2012 Federal Register notice adopting the 2012 H-2B Rule. The administrative record also includes the 2015 Federal Register notice adopting the Final Rule; the 2013 Interim Final Wage Rule, which is the basis of the 2015 Final Rule; and all timely, non-duplicative comments received in response. However, the record does not contain materials concerning DHS's 2008 Labor-Certification Regulations.

         About a week after the filing, on August 24, 2016, counsel for plaintiffs, R. Wayne Pierce, Esquire, contacted defense counsel via email, beginning a series of exchanges in which plaintiffs asserted flaws in the administrative record and the certification of the record. Plaintiffs indicated that they planned to seek to add unspecified "additional documents" into the record. ECF 69-1 at 16. Defense counsel responded the following day, asking counsel to explain what documents he believed should be included in the administrative record. Id. at 21.

         On August 26, 2016, plaintiffs‘ counsel replied, asserting that the record certification was incomplete because it failed to state explicitly that the index contained "''all‘" documents "''considered‘" by the agencies during the rulemaking process. Id. at 19. Defense counsel responded on August 29, 2016, asking again what documents plaintiffs believed should be in the record that were not included. Id. at 25. Defendants also noted that the record certification was virtually identical to that used in Bayou Lawn & Landscape Services v. Johnson, 173 F.Supp.3d 1271 (N.D. Fla. 2016), which also challenged the 2015 Rules, and in which plaintiff The Small and Seasonal Business Legal Center was a party, and in La. Forestry Ass'n v. Solis, 889 F.Supp.2d 711 (E.D. Pa. 2012), a case challenging a 2011 DOL regulation regarding the H-2B visa program, in which plaintiffs‘ counsel participated. ECF 69-1 at 25; see also ECF 69 at 19. According to defendants, no party in either case raised any issue with the certifications. ECF 69 at 19.

         On August 30, 2016, Mr. Pierce responded, alleging that defendants were required to submit a certification that established, among other things, that "the relevant agency official" had "actually considered" the record; it "is full or complete"; and it "existed at the time of the decision." ECF 69-1 at 24. On August 31, 2016, defense counsel responded, noting that they were "still waiting to hear from [Mr. Pierce] what exactly [he] think[s] it is that should have been in the record that was not." ECF 69-1 at 32. Defense counsel also said that, "out of an interest in avoiding unnecessary, wasteful motion practice, " if plaintiffs agreed to "stipulate in writing to not filing any motion to supplement the record to submit extra-record evidence that is not otherwise subject to judicial notice, " defendants would add additional language to the certification to clarify that "this is the full and complete record." Id. (underlining in original).

         Plaintiffs declined and, on September 13, 2016, they provided defendants with a draft motion to strike and correct the record certification. ECF 69-1 at 42. Then, on September 27, 2016, defendants filed a "Corrected Certified Index", which contains three corrections. ECF 53 at 1. First, defendants corrected the title of item 7 of the index. Id. at 1-2. Second, the index bifurcated entry 14 into two separate entries, numbers 14 and 15. Third, the certification was revised to include language indicating that for both DHS and DOL, the corrected index was the "true, correct, and complete" record considered by the agencies in jointly promulgating the 2015 Rules. Id. at 2. The revised index is docketed at ECF 53-2 and contains 19 entries. The revised certification is located at ECF 53-1 and consists of certifications by DOL and DHS.

         DOL‘s certification, again signed by Mr. Thompson, indicates that Mr. Thompson is employed as Acting Administrator of OFCL with responsibility for "overall management of OFLC, " including during the period when the 2015 Rules were promulgated. ECF 53-1 at 1. The certification further provides that "OFLC maintains the documents relevant to these rules held in DOL‘s possession that make up part of the administrative record for the [Interim Final Rule] and Final Rule, " including "items 1-13 and 15-19 of the attached index, " and that "to the best of" Mr. Thompson‘s knowledge, "these documents are a true and correct copy of the original document [sic] located in the files of DOL." Id. Finally, Mr. Thompson certified that "to the best of [his] knowledge and belief" the "materials listed in the attached index are a true, correct, and complete administrative record in this action, and that this index lists all non-privileged documents considered by DOL in issuing the [Interim Final Rule] and Final Rule." Id. at 2-3.

         DHS‘s certification, signed by Denise M. Bailey, provides that Ms. Bailey is a Records Specialist at DHS, responsible for the Office of the Executive Secretary records, including at the time that the 2015 Rules were promulgated. ECF 53-1 at 4. The certification further states that Ms. Bailey is the "custodian of the documents relevant to these rules held in DHS‘s possession that make up part of the administrative record for the IFR and Final Rule, " including "item 14 of the attached index, " which is, "to the best of [her] knowledge, " a "true and correct copy of the original document located in the files of DHS." Id. Finally, Ms. Bailey certified that "to the best of [her] knowledge and belief" the "materials listed in the attached index are a true, correct, and complete administrative record in this action, and that this index lists all non-privileged documents considered by DHS in issuing the [Interim Final Rule] and Final Rule." Id. at 4-5.

         According to defendants, on October 18, 2016, plaintiffs "for the first time disclosed being in possession of some 17, 778 documents from DHS and others from DOL…alleging that some or all of these 17, 778 documents must be part of the administrative record." ECF 69 at 22; see also ECF 69-1 at 60.

         Plaintiffs explain that on May 28, 2015, plaintiffs' counsel sent substantively identical FOIA requests to USCIS and DOL requesting copies of any documents pertaining to the DHS's transfer of any H-2 or H-2B authority to DOL at any time since 1952, as well as all statements of DOL rulemaking or adjudicative authority. ECF 61-1 at 38; see also ECF 60-14 (FOIA request to USCIS); ECF 60-15 (FOIA request to DOL). In response, on October 2, 2015, DOL contended that all of the documents requested could be viewed online and included the DOL‘s news release discussing the 2015 Rules, the Interim Final Rule, and the Final Rule. ECF 60-16 (DOL's Response to FOIA Request).

         Then, on August 26, 2016, DHS responded to the FOIA request by producing 17, 778 pages, consisting of, ECF 61-1 at 38:

15, 785 pages "released in part" (meaning the entire page was redacted but for a notation of the claimed FOIA exemption)
1770 pages "released in their entirety" (meaning that they were extensively redacted)
212 pages "with[eld]" for no stated reason 11 pages referred to DHS "for their direct response to you"

See also ECF 60-16 (USCIS's Response to FOIA Request). According to plaintiffs, DHS has not responded as to the "missing" 11 pages. ECF 60-1 at 39.

         On November 4, 2017, plaintiffs filed the instant Motion. Thereafter, defendants proposed that they would be willing to provide the record relevant to the 2008 Labor-Certification Regulations as a basis for resolving the outstanding record dispute. ECF 69 at 22-23; ECF 63 at 1. According to defendants, plaintiffs declined that offer. ECF 69 at 23.

         II. Standard of Review

         The APA provides for judicial review of a final agency action. See Roland v. United States Citizenship & Immigration Servs., 850 F.3d 625, 629 n. 3 (4th Cir. 2017); Friends of Back Bay v. U.S. Army Corps of Eng'rs, 681 F.3d 581, 586 (4th Cir. 2012); Lee v. U.S. Citizenship & Immigration Servs., 592 F.3d 612, 619 (4th Cir.2010); Ohio Valley Envtl. Coal v. Aracoma Coal Co., 556 F.3d 177, 192 (4th Cir. 2009). An agency‘s regulations must be set aside and held unlawful when they are "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law", 5 U.S.C. § 706(2)(A); when they are "contrary to constitutional right, power, privilege, or immunity", 5 U.S.C. § 706(2)(B); or when they are "in excess of statutory jurisdiction, authority, or limitations, or short of statutory right." 5 U.S.C. § 706 (2)(C).

         Generally, "claims brought under the APA are adjudicated without a trial or discovery, on the basis of an existing administrative record...." Audubon Naturalist Soc'y of the Cent. Atl. States, Inc. v. U.S. Dep't of Transp., 524 F.Supp.2d 642, 660 (D. Md. 2007) (citing Citizens for the Scenic Severn River Bridge, Inc. v. Skinner, 802 F.Supp. 1325, 1332 (D. Md. 1991), aff'd, 1992 WL 180138, (4th Cir. July 29, 1992)). In this context, "review of the administrative record is primarily a legal question...." Skinner, supra, 802 F.Supp. at 1332.

         "The APA provides that a reviewing court is bound to ''hold unlawful and set aside agency action‘ for certain specified reasons, including whenever the challenged act is ''arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.‘" Friends of Back Bay, 681 F.3d at 586-87 (quoting 5 U.S.C. § 706(2)(A)); see United States v. Bean, 537 U.S. 71, 77, (2002); Camp v. Pitts, 411 U.S. 138, 142 (1973) (per curiam); N. Carolina Growers' Ass'n, Inc. v. United Farm Workers, 702 F.3d 755, 763 (4th Cir.2012) (quoting 5 U.S.C. § 706(2)). Review under the APA is highly deferential, however, and the agency action enjoys a presumption of validity and regularity. Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 415 (1971), abrogated on other grounds by Califano v. Sanders, 430 U.S. 99 (1977); Ohio Valley Envtl. Coal. v. Aracoma Coal Co., 556 F.3d 177, 192 (4th Cir. 2009) (citing Natural Res. Def. Council, Inc. v. EPA, 16 F.3d 1395, 1400 (4th Cir.1993)). The party challenging an agency decision has the burden to demonstrate that the agency action was arbitrary or capricious. Sierra Club v. Marita, 46 F.3d 606, 619 (7th Cir.1995).

         Notably, "[t]he scope of review under the ''arbitrary and capricious' standard is narrow and a court is not to substitute its judgment for that of the agency...." Motor Vehicle Mfrs. Ass'n of the United States v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983). In assessing an agency decision, "the reviewing court ''must consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment.‘" Marsh v. Oregon Natural Res. Council, 490 U.S. 360, 378 (1989) (quoting Overton Park, 401 U.S. at 416). "''Deference is due where the agency has examined the relevant data and provided an explanation of its decision that includes ''a rational connection between the facts found and the choice made.‘" Ohio Valley Envtl. Coal., Inc. v. United States Army Corps of Engineers, 828 F.3d 316, 321 (4th Cir. 2016) (citation omitted); see Trinity Am. Corp. v. U.S. EPA, 150 F.3d 389, 395 (4th Cir. 1998); Clevepak Corp. v. U.S. EPA, 708 F.2d 137, 141 (4th Cir. 1983). However, "[t]he ''arbitrary and capricious' standard is not meant to reduce judicial review to a ''rubber-stamp‘ of agency action." Ohio Valley Envtl. Coal, 556 F.3d at 192 (quoting Ethyl Corp. v. Envtl. Prot. Agency, 541 F.2d 1, 34 (D.C.Cir.1976).

         To the extent an administrative record is relevant to issues subject to APA review under 5 U.S.C. § 706, "the focal point for judicial review should be the administrative record already in existence, not some new record made initially in the reviewing court." Camp, 411 U.S. at 142. "[C]ourts are to decide, on the basis of the record the agency provides, whether the action passes muster under the appropriate APA standard of review." Fla. Power & Light Co. v. Lorion, 470 U.S. 729, 744 (1985). Section 706 of the APA instructs the reviewing court to review the "whole record or those parts of it cited by a party…." 5 U.S.C. § 706; Overton Park, 401 U.S. at 420 (1971) (clarifying that judicial review "is to be based on the full administrative record that was before the [agency] at the time it made its decision").

         "The whole administrative record includes pertinent but unfavorable information, and an agency may not exclude information on the ground that it did not ''rely‘ on that information in its final decision." Tafas v. Dudas, 530 F.Supp.2d 786, 793 (E.D. Va. 2008). See, e.g., Bar MK Ranches v. Yuetter, 994 F.2d 735, 739 (10th Cir.1993) (stating that "the administrative record consists of all documents and materials directly or indirectly considered by the agency."); Thompson v. United States Dep't of Labor, 885 F.2d 551, 555 (9th Cir.1989)("The whole administrative record ... consists of all documents and materials directly or indirectly considered by agency decision-makers and includes evidence contrary to the agency's position") (citation and quotation marks omitted, emphasis in Thompson); Ad Hoc Metals Coalition v. Whitman, 227 F.Supp.2d 134, 139 (D.D.C. 2002)(determining that a complete record must include any materials that were "referred to, considered by, or used by [the agency] before it issued its final rule"); Environmental Defense Fund, Inc. v. Blum, 458 F.Supp. 650, 661 (D.D.C. 1978)("The agency may not ... skew the ''record‘ for review in its favor by excluding from that ''record‘ information in its own files which has great pertinence to the proceeding in question.[]")

         However, a "complete administrative record" does not include "privileged materials, such as documents that fall within the deliberative process privilege, attorney-client privilege, and work product privilege." Tafas, 530 F.Supp.2d at 794 (citing Town of Norfolk v. U.S. ArmyCorps of Eng'rs,968 F.2d 1438, ...


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