Fifth Circuit Holds DACA Final Rule Violates the Immigration and Nationality Act but Limits Relief to Texas and Leaves Forbearance Provisions Intact

The decision

On January 17, 2025, the U.S. Court of Appeals for the Fifth Circuit affirmed in part and modified in part a district court injunction against the Department of Homeland Security’s 2022 Final Rule codifying the Deferred Action for Childhood Arrivals program, known as DACA. The court held that Texas has standing to challenge the Rule under the court’s own 2022 decision in the same litigation, and that “[b]ecause the Final Rule is materially identical to the 2012 Memorandum, the Final Rule substantively violates the INA.”

The court changed the remedy in two respects. It held that the district court erred by not severing the Rule’s forbearance-from-removal provisions from its work-authorization and benefits provisions, and it limited the injunction, including the effectiveness of the vacatur, to Texas. The court preserved the stay protecting existing DACA recipients and remanded. In the opinion’s words: “We largely agree with the district court and thus affirm its judgment, though we modify the remedial order.”

Background

According to the opinion, the DHS Secretary announced DACA in a 2012 memorandum that instructed immigration officials not to remove certain people brought to the United States as children who met listed criteria. Those granted deferred action were deemed eligible for a renewable two-year period of lawful presence, and were also eligible for work authorization and various federal benefits. In 2020, the Supreme Court held in DHS v. Regents of the University of California that the Trump Administration’s rescission of DACA was reviewable under the Administrative Procedure Act and was arbitrary and capricious. In 2022, after notice and comment, DHS promulgated a Final Rule that replaced the memorandum, continued the policy in the same form, and added an express severability provision.

This suit began in May 2018, when ten states (the opinion notes that Maine dismissed itself) challenged the memorandum under the APA’s notice-and-comment requirements, the Immigration and Nationality Act, and the Take Care Clause. A group of DACA recipients, whom the opinion calls the “Private Intervenors,” and the State of New Jersey intervened as co-defendants. In 2021, the district court granted summary judgment for the states, finding standing based on Texas’s emergency-healthcare and public-education expenditures, holding the memorandum procedurally and substantively unlawful, vacating it, and entering a nationwide permanent injunction against approving new applications. It stayed the vacatur as to existing recipients. In Texas v. United States, 50 F.4th 498 (5th Cir. 2022), which the opinion calls “Texas II,” the Fifth Circuit affirmed in part, preserved the stay, and remanded for the district court to consider the Final Rule.

On remand, the district court found no material differences between the Final Rule and the memorandum, held the Rule’s forbearance and benefits provisions not severable, supplemented its vacatur and nationwide injunction to cover the Rule, and again stayed the order as to recipients who received initial DACA status before July 16, 2021. The government, the Private Intervenors, and New Jersey appealed.

The court’s reasoning

Standing

The court, in an opinion by Judge Jerry E. Smith, stated that “Texas is the only state that has attempted to demonstrate standing.” It described Texas’s theory: DACA recipients impose over $750 million in annual costs on the state, those costs are traceable to the Final Rule, and a favorable judgment would at least partially alleviate the harm. A unanimous panel had accepted that theory in Texas II.

The court treated the question as governed by the circuit’s rule of orderliness, under which “one panel of our court may not overturn another panel’s decision, absent an intervening change in the law, such as by a statutory amendment, or the Supreme Court, or our en banc court.” The government argued that the Supreme Court’s 2023 decision in United States v. Texas, which the opinion calls “Immigration Priorities,” had abrogated Texas II. The court disagreed. It noted that Immigration Priorities described its own holding as narrow and expressly stated that “a challenge to an Executive Branch policy that involves both the Executive Branch’s arrest or prosecution priorities and the Executive Branch’s provision of legal benefits or legal status could lead to a different standing analysis,” citing Regents and the Fifth Circuit’s 2015 DAPA decision. Examining footnote 3 of that decision, on indirect fiscal effects, and the three cases it cited, the court concluded that the footnote “announces no broad new rule.” It added that “Texas’s injury is not speculative at all,” citing the district court’s finding, based on the Private Intervenors’ own expert, of over $250,000,000 in annual state costs and $533,000,000 in local costs.

The court also found that Haaland v. Brackeen and FDA v. Alliance for Hippocratic Medicine did not unequivocally overrule Texas II. It distinguished Brackeen on the ground that the district court here found Texas’s costs would at least partially decline if it obtained relief, and it found the causal chain here less attenuated than the border-state-teacher hypothetical in Alliance. Finally, the court rejected the argument that Texas II rested on “special solicitude” for states. Reading Texas II’s statement that Texas established redressability “[e]specially with the benefit of special solicitude,” the court concluded that “redressability is nevertheless satisfied under normal standing requirements.” It stated that it need not decide whether the concept of special solicitude has been definitively interred.

Judge Higginson concurred in the judgment only as to this part of the opinion; no separate writing explains his position.

Cause of action and judicial review

The court held that Texas I controls the zone-of-interests question and that Immigration Priorities did not unequivocally overrule it, repeating Texas I’s conclusion: “The interests the states seek to protect fall within the zone of interests of the INA.” It did not resolve whether the government had forfeited the argument. The court also rejected the contention that 8 U.S.C. § 1252(b)(9) and (g) strip jurisdiction, stating the argument was raised and rejected in Texas I and Regents, and quoting Regents that § 1252(b)(9) “is not aimed at this sort of case.”

Substantive illegality

The court stated that the government acknowledged its merits arguments were foreclosed by Texas II. Because no party contended that the Supreme Court or the en banc court had ruled otherwise or that Congress had amended the INA, and because the Final Rule is materially identical to the memorandum, the court held that Texas II controls and DACA remains “manifestly contrary to the [INA].” The opinion does not address the states’ Take Care Clause claim.

Remedy

The court rejected the government’s arguments that the APA does not authorize vacatur and that the district court should have remanded without vacatur, stating that “Vacatur is the default remedy for violations under § 706(2)” and that remand without vacatur is limited to “rare cases.” It also held that Texas II’s rejection of the government’s § 1252(f)(1) theory controls.

On severability, the court agreed with the government. It noted the Rule’s severability clause, 8 C.F.R. § 236.24(a), and the Secretary’s statement that the benefit-conferring provisions are intended to be severable from any grant of forbearance. The court found that the district court’s conclusion that DHS would not have adopted DACA without benefits “unduly ignores the severability clause,” and it cited Regents for the proposition that “forbearance and benefits are legally distinct and can be decoupled.” It concluded: “Because DHS intended the aspects of DACA to be severable and to function independently from one another, the district court erred by not severing the forbearance provisions from the work-authorization provisions.”

On scope, the court stated that “nationwide injunctions are not required or even the norm.” It wrote: “Because Texas is the only plaintiff that has demonstrated or even attempted to demonstrate an actual injury, and because that injury is fully redressable by a geographically limited injunction, we narrow the scope of injunction to Texas.” Although the court had previously upheld nationwide relief in immigration cases based on uniformity, it found the balance of equities outweighed that interest here, noting that New Jersey intervened to defend DACA and 22 states and the District of Columbia filed an amicus brief urging preservation of the program.

Stay

Applying the Nken v. Holder factors, the court stated that, although Texas succeeded on the merits, its prior decision to maintain the stay and the reliance interests DACA has created led it to preserve the stay as to existing recipients.

Separate opinions

None. A footnote states: “Judge Higginson concurs in full as to parts I, II, IV, V, and VII, and concurs in judgment only as to part III.” The footnote does not mention Part VI, on remedy.

Status

The court affirmed the injunction in part and modified it in part, limited injunctive relief and the effectiveness of the vacatur to Texas, required the relief to heed the Rule’s severability provision, and remanded “for further proceedings as the district court may find appropriate.” It stated: “The request for a stay is GRANTED pending a further order of this court or the Supreme Court.” The opinion adds that the court imposes no restriction on what the district court may address on remand and expresses no view on what it should decide.

The decision was widely reported. The Associated Press reported that the Justice Department and the Department of Homeland Security did not immediately comment.