By Julietta Bisharyan, Linh Nguyen and Lauren Smith
Plaintiff cities Seattle, Washington; Portland, Oregon and New York, New York have filed a complaint for declaratory and injunctive relief to the U.S. District Court, Western District in Seattle, declaring that the Anarchist Memo is unconstitutional.
The defendants in this complaint are President Donald Trump; U.S. Office of Management and Budget; Russel Vought, Director of OMB; U.S. Department of Justice; U.S. Attorney General William Barr; U.S. Department of Homeland Security; Chad F. Wolf, Secretary of Homeland Security for Strategy, Policy, and Plans; U.S. Department of Federal Transit Administration and K. Jane Williams, Deputy Administrator of FTA.
On Sep. 2, 2020, after months of the George Floyd protests and unrest in Portland, Trump issued a Presidential Memorandum titled “Reviewing Funding to State and Local Government Recipients of Federal Funds That Are Permitting Anarchy, Violence, and Destruction in American Cities” (the “Anarchist Memo”).
The Anarchist Memo allowed U.S. Attorney General William Barr to identify “anarchist jurisdictions” based on “an arbitrary and vague set of factors related to local policing.” It also allowed the director of the United States Office of Management and Budget, Russel Vought, to instruct federal agencies to restrict federal grants to these jurisdictions to the maximum extent of the law.
The Anarchist Memo declares it the official “policy and purpose of the United States Government” not to “allow Federal tax dollars to fund cities that allow themselves to deteriorate into lawless zones.” It claims that certain cities have “descended into ‘anarchy’ by ‘failing to enforce the law, disempowering and significantly defunding police departments, and refusing to accept offers of Federal law enforcement assistance.’”
The three cities impacted by the Memo were not given prior notice or an opportunity to dispute, as the declaration was issued in a press release. In the press release, A.G. Barr stated that he “hoped” the cities would “reverse course” as a result of the threat to their vital funding.
The plaintiff cities state that the defendants’ actions violate “bedrock principles of American democracy”: separation of powers, federalism and due process.
In the complaint, they state that this is a blatant violation of separation of powers because the executive branch does not have the Power of the Purse. The Power of the Purse belongs to Congress. Furthermore, Congress did not allow the A.G. to designate cities as “anarchist jurisdictions” from which federal funding may be withheld.
The memorandum was also a violation of federalism, protected by the Tenth Amendment, because it imposed an “aggressive and extreme threat” to strip cities of critical federal funding unless the local officials submitted to Trump’s demands on governing the cities, according to the pleading.
Lastly, plaintiffs argue the memorandum was a violation of the due process under the Fifth Amendment because the cities were not given reasonable and clear notice of the issuance of the Memo and were not given the opportunity to be heard. There was also no process to dispute or appeal the designation.
The cities rely on billions of dollars in federal funding to provide a range of services, including housing, public transportation and emergency relief. During this time of COVID-19, these fundings are especially crucial, the plaintiffs said.
The complaint states, “It is the Defendants, not the Cities, who are engaging in lawless behavior and threatening the democratic order established by the Framers. The Cities have made nuanced policy choices about how best to protect public safety and property while respecting protesters’ rights during times of civil unrest.”
According to a recent U.S. Crisis Monitor report, more than 93 percent of all demonstrations connected to the Black Lives Matter movement were peaceful protests. The plaintiffs acknowledge that some protests resulted in looting, vandalism and violence, to which they responded in accordance with local laws to ensure public safety and prevent property damage while protecting the First 
Amendment right to peaceful protest.
The cities have also rejected the deployment of federal law enforcement agents to police the local protests, though they were deployed anyway. The U.S. Crisis Monitor found that prior to the deployment of federal police, “over 83 percent of demonstrations in Oregon were non-violent. Post-deployment, the percentage of violent demonstrations has risen from under 17 percent to over 42 percent, suggesting that the federal response has only aggravated unrest.”
Trump also threatened to deploy federal law enforcement to other Democratic-led cities, including Chicago, Philadelphia, Detroit, Baltimore and Oakland, which he called “all run by very liberal Democrats. All run, really, by radical left.”
In October, the federal government began imposing the Anarchist Memo and Designation as a grant consideration and on October 8, the FTA published a Notice of Funding Opportunity.
This Notice included the Anarchist Memo as part of the criteria for selecting the recipients of $10 million in “research demonstration grants for public transit agencies to develop, deploy, and demonstrate innovative solutions that improve the operational efficiency of transit agencies, as well as enhance the mobility of transit users affected by the COVID-19 public health emergency.”
Plaintiffs maintain that despite the fact that this new “Public Transportation COVID-19 Research Demonstration Grant Program” has nothing to do with aspects of the Anarchist Memo or the A.G.’s Anarchist Designations, the FTA’s Notice stated that the federal government “will review and consider applications for funding pursuant to this Notice in accordance with the [Anarchist Memo].”
The Notice also established that the Trump Administration “is taking concrete steps to carry out its unlawful threat to cut federal funding to the Cities.” The cities in the lawsuit would be forced to “reverse course” and let federal law enforcement replace policing and public safety authority in order to avoid being stripped of federal funding during a time when cities are “grappling with fiscal crises triggered by the COVID-19 pandemic.”
The Designation harms the Cities in multiple ways because it creates budget uncertainty during an economic crisis, the plaintiffs’ pleading noted.
First, the federal government has started restricting federal grants to “anarchist jurisdictions” and according to the Anarchist’s Memo, it is likely that additional federal grants will be restricted. Cities rely on federal grants to support local efforts in order to provide affordable housing, disaster relief as well as other essential services. Taking away federal funding will be “devastating.”
Second, the defunding threat posed by the Anarchist Memo and Designation has created uncertainty in the Cities’ budgeting processes. These harms are exacerbated by the COVID-19 pandemic because it has already strained the Cities’ finances.
As a result of the pandemic, all cities claim to face economic uncertainty. In Portland, the COVID-19 pandemic has already caused a “$75 million loss in general fund revenue for fiscal year 2020-2021, resulting in wage freezes and furlough requirements for certain City employees.”
In addition to the “imminent harm” the loss of federal grants will continue to cause; the defendants have issued an “ultimatum” to the cities “that causes tremendous uncertainty with no recourse.”
If the cities decided to submit to the executive branch’s demands, there is no guidance on what that would look like and how it would be accomplished, they say, and alternatively, the Constitution does provide that cities can govern themselves, however they will lose critical federal funding.
If a city were to reject this ultimatum, they have two choices: cut the budget resulting in less services or keep the budget at the same level it would be if they were receiving federal funds and risk an “emergency shortfall” if the federal government cuts that funding.
One claim in the lawsuit is that labeling cities as “anarchist jurisdictions” appears to violate the Administrative Procedure Act (APA). The APA governs the process of how federal agencies develop and issue regulations and provides judicial review standards if a person has been adversely affected by agency action.
The lawsuit goes on to state that “the criteria provided in the Anarchist Memo are arbitrary and capricious” because it uses “subjective criteria” and is “based on justifications that are contradicted by the facts and do not establish that the cities have abandoned governance for anarchy.”
Instead the A.G. relied on criteria from the Anarchist Memo to make the Designation, therefore relying on shootings and violent activities that occur during protests, said plaintiffs, adding that it does ignore that the cities have not allowed violence to persist. Instead, they have “taken action to maintain public safety during the protests…by imposing curfews, mobilizing police resources, taking police action, and making arrests.”
The lawsuit also states that the Designation “arbitrarily relies on a claim that the Cities’ have rejected federal law enforcement. That is fiction.”
The suit points out the discrepancy in what areas are labeled as “anarchist.” In early May, armed protesters with assault rifles and tactical gear entered the Michigan State Capitol building in Lansing to protest the state’s COVID-19 lockdown. President Trump tweeted that the armed protesters were “very good people.” Despite this, Lansing was not considered an anarchist jurisdiction.
Within the first claim for relief, the plaintiffs allege that the defendants’ actions have violated the Administrative Procedure Act (APA), which requires courts to set aside agency action that is “in excess of statutory jurisdiction, authority, or limitations, or short of statutory right.”
In deliberation with Russel Vought and Chad Wolf, A.G. Barr is claimed to have designated and provided justifications without any statutory authority.
The second claim states that the designation is a final agency action that is arbitrary and capricious, has inflicted continuing injury on the cities of Seattle, New York and Portland, and violates the APA.
In the third claim, the defendants are alleged of violating the APA through violation of the Constitution, specifically, separation of powers, the spending clause, and the Tenth and Fifth Amendments.
In the fourth claim, it is alleged that the defendants unlawfully usurped Congress’s spending and legislative powers by using the “Anarchist Memo” and designation to direct federal agencies to place conditions on federal funding without any delegated statutory authority.
The claim also alleges that the United States Department of Federal Transit Administration (FTA) and the Deputy Administrator of FTA, K. Jane Williams, violated separation of powers in using the Anarchist Memo and designation as a factor in assessing applications for the Public Transportation COVID-19 Research Demonstration Grant Program, without delegated statutory authority.
The fifth claim asserts that the actions of all defendants violate the limitations on the exercise of power under the spending clause, as the Anarchist Memo and Designation impose new, retroactive funding restrictions based on ambiguous criteria and that are not pertinent to the purpose of any federal grant program.
The sixth claim alleges that all defendants violated the Tenth Amendment by coercing the cities of Seattle, New York and Portland to conform to their policy preferences in the exercise of the fundamentally local police power.
In the seventh and final claim, the plaintiffs assert that the cities, without clear standards, notice, and neither a pre- or post-deprivation opportunity to be heard, have been deprived in two distinct ways of their due process rights as required by the Fifth Amendment.
In addition, the claims ask to prohibit the Department of Justice (DOJ), the Office of Management and Budget, Barr and Vought from taking any further steps to carry out the Anarchist Memo and to enjoin the FTA and Williams from considering the Anarchist Memo and Designation in issuing grants under the Public Transportation COVID-19 Research Demonstration Grant Program.
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