Clinton v. City of New York, 524 U.S. 417 (1998)

Clinton v. City of New York

No. 97-1374

Argued April 27, 1998
Decided June 25, 1998
524 U.S. 417

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

Syllabus

Last Term, this Court determined on expedited review that Members of Congress did not have standing to maintain a constitutional challenge to the Line Item Veto Act (Act), 2 U.S.C. § 691 et seq., because they had not alleged a sufficiently concrete injury. Raines v. Byrd, 521 U.S. 811. Within two months, the President exercised his authority under the Act by cancelling § 4722(c) of the Balanced Budget Act of 1997, which waived the Federal Government’s statutory right to recoupment of as much as $2.6 billion in taxes that the State of New York had levied against Medicaid providers, and § 968 of the Taxpayer Relief Act of 1997, which permitted the owners of certain food refiners and processors to defer recognition of capital gains if they sold their stock to eligible farmers’ cooperatives. Appellees, claiming they had been injured, filed separate actions against the President and other officials challenging the cancellations. The plaintiffs in the first case are the City of New York, two hospital associations, one hospital, and two unions representing health care employees. The plaintiffs in the second are the Snake River farmers’ cooperative and one of its individual members. The District Court consolidated the cases, determined that at least one of the plaintiffs in each had standing under Article III, and ruled, inter alia, that the Act’s cancellation procedures violate the Presentment Clause, Art. I, § 7, cl. 2. This Court again expedited its review.

Held:

1. The appellees have standing to challenge the Act’s constitutionality. They invoked the District Court’s jurisdiction under a section entitled "Expedited Review," which, among other things, expressly authorizes "any individual adversely affected" to bring a constitutional challenge. § 692(a)(1). The Government’s argument that none of them except the individual Snake River member is an "individual" within § 692(a)(1)’s meaning is rejected because, in the context of the entire section, it is clear that Congress meant that word to be construed broadly to include corporations and other entities. The Court is also unpersuaded by the Government’s argument that appellees’ challenge is nonjusticiable. These cases differ from Raines not only because the President’s exercise of his cancellation authority has removed any concern about the dispute’s ripeness, but, more importantly, because the parties have alleged a "personal stake" in having an actual injury redressed, rather than an "institutional injury" that is "abstract and widely dispersed." 521 U.S. at 829. There is no merit to the Government’s contention that, in both cases, the appellees have not suffered actual injury because their claims are too speculative and, in any event, are advanced by the wrong parties. Because New York State now has a multi-billion dollar contingent liability that had been eliminated by § 4722(c), the State, and the appellees, suffered an immediate, concrete injury the moment the President cancelled the section and deprived them of its benefits. The argument that New York’s claim belongs to the State, not appellees, fails in light of New York statutes demonstrating that both New York City and the appellee providers will be assessed for substantial portions of any recoupment payments the State has to make. Similarly, the President’s cancellation of § 968 inflicted a sufficient likelihood of economic injury on the Snake River appellees to establish standing under this Court’s precedents, cf. Bryant v. Yellen, 447 U.S. 352, 368. The assertion that, because processing facility sellers would have received the tax benefits, only they have standing to challenge the § 968 cancellation not only ignores the fact that the cooperatives were the intended beneficiaries of § 968, but also overlooks the fact that more than one party may be harmed by a defendant, and therefore have standing. Pp. 428-436.

2. The Act’s cancellation procedures violate the Presentment Clause. Pp. 436-449.

(a) The Act empowers the President to cancel an "item of new direct spending" such as § 4722(c) of the Balanced Budget Act and a "limited tax benefit" such as § 968 of the Taxpayer Relief Act, § 691(a), specifying that such cancellation prevents a provision "from having legal force or effect," §§ 691e(4)(B)-(C). Thus, in both legal and practical effect, the presidential actions at issue have amended two Acts of Congress by repealing a portion of each. Statutory repeals must conform with Art. I, INS v. Chadha, 462 U.S. 919, 954, but there is no constitutional authorization for the President to amend or repeal. Under the Presentment Clause, after a bill has passed both Houses, but "before it become[s] a Law," it must be presented to the President, who "shall sign it" if he approves it, but "return it," i.e., "veto" it, if he does not. There are important differences between such a "return" and cancellation under the Act: The constitutional return is of the entire bill, and takes place before it becomes law, whereas the statutory cancellation occurs after the bill becomes law, and affects it only in part. There are powerful reasons for construing the constitutional silence on the profoundly important subject of presidential repeals as equivalent to an express prohibition. The Article I procedures governing statutory enactment were the product of the great debates and compromises that produced the Constitution itself. Familiar historical materials provide abundant support for the conclusion that the power to enact statutes may only "be exercised in accord with a single finely wrought and exhaustively considered procedure." Chadha, 462 U.S. at 951. What has emerged in the present cases, however, are not the product of the "finely wrought" procedure that the Framers designed, but truncated versions of two bills that passed both Houses. Pp. 436-441.

(b) The Court rejects two related Government arguments. First, the contention that the cancellations were merely exercises of the President’s discretionary authority under the Balanced Budget Act and the Taxpayer Relief Act, read in light of the previously enacted Line Item Veto Act, is unpersuasive. Field v. Clark, 143 U.S. 649, 693, on which the Government relies, suggests critical differences between this cancellation power and the President’s statutory power to suspend import duty exemptions that was there upheld: such suspension was contingent on a condition that did not predate its statute, the duty to suspend was absolute once the President determined the contingency had arisen, and the suspension executed congressional policy. In contrast, the Act at issue authorizes the President himself to effect the repeal of laws, for his own policy reasons, without observing Article I, § 7, procedures. Second, the contention that the cancellation authority is no greater than the President’s traditional statutory authority to decline to spend appropriated funds or to implement specified tax measures fails because this Act, unlike the earlier laws, gives the President the unilateral power to change the text of duly enacted statutes. Pp. 442-447.

(c) The profound importance of these cases makes it appropriate to emphasize three points. First, the Court expresses no opinion about the wisdom of the Act’s procedures, and does not lightly conclude that the actions of the Congress that passed it, and the President who signed it into law, were unconstitutional. The Court has, however, twice had full argument and briefing on the question, and has concluded that its duty is clear. Second, having concluded that the Act’s cancellation provisions violate Article I, § 7, the Court finds it unnecessary to consider the District Court’s alternative holding that the Act impermissibly disrupts the balance of powers among the three branches of Government. Third, this decision rests on the narrow ground that the Act’s procedures are not authorized by the Constitution. If this Act were valid, it would authorize the President to create a law whose text was not voted on by either House or presented to the President for signature. That may or may not be desirable, but it is surely not a document that may "become a law" pursuant to Article I, § 7. If there is to be a new procedure in which the President will play a different role, such change must come through the Article V amendment procedures. Pp. 447-449.

985 F.Supp. 168, affirmed.

STEVENS, J., delivered the opinion of the Court, in which REHNQUIST, C. J., and KENNEDY, SOUTER, THOMAS, and GINSBURG, JJ., joined. KENNEDY, J., filed a concurring opinion, post, p. 449. SCALIA, J., filed an opinion concurring in part and dissenting in part, in which O’CONNOR, J., joined, and in which BREYER, J., joined as to Part III, post, p. 453. BREYER, J., filed a dissenting opinion, in which O’CONNOR and SCALIA, JJ., joined as to Part III, post, p. 469.