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Williams v. Lew

United States Court of Appeals, District of Columbia Circuit

April 22, 2016

VICTOR K. WILLIAMS, APPELLANT
v.
JACOB J. LEW, IN HIS OFFICIAL CAPACITY AS SECRETARY OF THE U.S. TREASURY DEPARTMENT AND UNITED STATES DEPARTMENT OF THE TREASURY, APPELLEES

         Argued February 17, 2016

          Appeal from the United States District Court for the District of Columbia. (No. 1:14-cv-00183).

         Justin G. Florence argued the cause for appellant. On the briefs was Victor Williams, Pro se. Douglas Hallward-Driemeier, Edward F. Roche, and Jonathan Ference-Burke entered appearances.

         Molly R. Silfen, Attorney, U.S. Department of Justice, argued the cause for appellees. With her on the brief were Benjamin C. Mizer, Principal Deputy Assistant Attorney General, and Mark B. Stern, Attorney.

         Before: TATEL and GRIFFITH, Circuit Judges, and SENTELLE, Senior Circuit Judge.

          OPINION

         Sentelle, Senior Circuit Judge

         Appellant Victor Williams, as a holder of U.S. public debt, challenges the constitutionality of the Debt Limit Statute, 31 U.S.C. § 3101. Williams alleges on appeal violations of the Fourteenth Amendment Public Debt Clause, U.S. Const. amend. XIV, § 4, and the Fifth Amendment Due Process Clause, U.S. Const. amend. V. He seeks relief declaring the Debt Limit Statute unconstitutional and enjoining the Secretary from enforcing the statute. Because Williams fails to allege plausible factual allegations to establish the constitutional minimum requirements for Article III standing, either in the first amended complaint filed with the district court or in his proposed amended complaint filed with this Court under 28 U.S.C. § 1653, we affirm the decision of the district court dismissing Williams's claims for lack of standing. We also affirm the district court's order denying Williams's motion to amend his first amended complaint and deny Williams's motion to amend his complaint on appeal.

         I. BACKGROUND

         This case is an outgrowth of the continuing debate surrounding the statutory limit on U.S. debt. The Debt Limit Statute, 31 U.S.C. § 3101(b), imposes an upper limit on " [t]he face amount of obligations issued under this chapter and the face amount of obligations whose principal and interest are guaranteed by the United States Government." The United States first instituted a ceiling on the federal debt in 1917 to accompany the United States' entrance into World War I. See D. Andrew Austin, Cong. Research Serv., The Debt Limit: History and Recent Increases 2-3 (2008), http://fpc.state.gov/documents/organization/105193.pdf ; see also Act of Sept. 24, 1917, Pub. L. No. 65-43, 40 Stat. 288 (codified as amended at 31 U.S.C. § 3101). The original purpose of the Debt Limit Statute was to increase the Treasury Department's flexibility to manage the government's financial obligations. See Austin, supra, at 3; see also Josh Hazan, Unconstitutional Debt Ceilings, 103 Geo. L.J. Online 29, 30-32 (2014). Yet both in 2011 and in 2013, congressional budgeting disputes threatened default on U.S. obligations as outstanding debt broached the debt ceiling. See Hazan, supra, at 29-30. Following the 2011 impasse, " U.S. government debt was downgraded, the stock market fell, measures of volatility jumped, and credit risk spreads widened noticeably . . . ." U.S. Dep't of the Treasury, The Potential Macroeconomic Effect of Debt Ceiling Brinksmanship 1 (2013), https://www.treasury.gov/connect/blog/Pages/Report-on-Macroeconomic-Effect-of-Debt-Ceiling-Brinkmanship.aspx . Likewise, the 2013 dispute " further eroded confidence in the United States government, and wounded the already fragile economy." Chad DeVeaux, The Fourth Zone of Presidential Power: Analyzing the Debt-Ceiling Standoffs Through the Prism of Youngstown Steel, 47 Conn. L. Rev. 395, 407 (2014). In the wake of these political impasses, Congress presently has suspended the Debt Limit Statute through March 15, 2017. See Bipartisan Budget Act of 2015, Pub. L. No. 114-74, § 901(a), 129 Stat. 584, 620.

         Williams holds various Treasury-issued public debt instruments, including " savings bonds and Treasury bills, notes, bonds, and TIPS [Treasury Inflation Indexed Securities] of various durations (4-weeks, 13-weeks, 26-weeks, 52-week[s], 3-years, 5-years, 7-years, [and] 30-years)." J.A. 20 ¶ 39. Seeking a judicial solution to what he views as the perpetual " political conflict regarding the inevitable need to raise the debt limit," J.A. 6 ¶ 2, on February 7, 2014, Williams filed suit, challenging the constitutionality of the Debt Limit Statute, against the U.S. Department of the Treasury and the Secretary of the U.S. Treasury (collectively, the " Treasury Department" ). Before the Treasury Department lodged a responsive pleading or Rule 12(b) motion, Williams filed a first amended complaint as-of-right on March 5, 2014. Cf. Fed.R.Civ.P. 15(a)(1). The first amended complaint sought a judgment declaring the Debt Limit Statute unconstitutional and a permanent injunction prohibiting the Treasury Department from " relying upon, invoking, or enforcing" the statute. J.A. 34.

         Williams asserted three alleged constitutional infirmities in the Debt Limit Statute before the district court. First, he claimed that the statute violates the Public Debt Clause, U.S. Const. amend. XIV, § 4, which states, in relevant part:

The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.

See J.A. 21 ¶ 42(A); see also Amended Complaint Filed on Appeal Pursuant to 28 U.S.C. 1653 ¶ ¶ 65(A), 66, Williams v. Lew, No. 15-5065 (D.C. Cir. May 14, 2015) [hereinafter Pr. Am. Compl.]. Second, Williams alleged a violation of the Fifth Amendment's Due Process Clause based on the Treasury Department's " arbitrary enforcement" of the Debt Limit Statute. J.A. 21 ¶ 42(A); see also Pr. Am. Compl. ¶ ¶ 65(A), 66. Finally, Williams made a separation-of-powers argument that the Debt Limit Statute " prevent[s] the Executive from carrying out sworn Article II § 3 duties to 'take Care that the Laws be faithfully executed.'" J.A. 21 ¶ 42(B); see also Pr. Am. Compl. ¶ 65(B).

         The Treasury Department moved to dismiss Williams's first amended complaint under Rule 12(b)(1) for lack of standing. Williams then moved under Rule 15(a)(2) for leave to file a second amended complaint, in part " to clarify his claims [and to] further explain and develop the basis for his standing . . . ." J.A. 96. The district court denied Williams's motion to amend without explanation via minute order on May 18, 2014. On January 6, 2015, the district court granted the Treasury Department's motion to dismiss, concluding that Williams lacked standing to pursue his claims in federal court. Williams now appeals from the district court's denial of his motion to amend and from the order dismissing his claims for lack of standing. Williams also moves this Court for leave to amend his complaint under 28 U.S.C. § ...


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