Neal Katyal of Hogan Lovells in Washington, D.C., Oct.30, 2017. Photo: Diego M. Radzinschi/ALM

The U.S. attorney general may not withhold funding from a city in retaliation for maintaining “sanctuary city” policies, Hogan Lovells attorney Neal Katyal argued before the U.S. Court of Appeals for the Third Circuit on Wednesday.

Katyal, who was representing the Philadelphia city government, made his arguments just as U.S. Attorney General Jeff Sessions submitted his resignation at the request of President Donald Trump. No one at the argument mentioned Sessions' departure.

Katyal's team and lawyers from the U.S. Department of Justice sparred before a federal appeals court panel over whether the attorney general may withhold federal grant money because of the city's immigration policies.

At issue is more than $1 million that the city hopes to get from the Edward Byrne Memorial Justice Assistance Grant. The DOJ has sought to withhold that money due to Philadelphia's stature as a so-called “sanctuary city,” which includes withholding information from federal immigration authorities about when an immigrant in local custody will be released.

Although many of the arguments surrounding immigration policies, and whether local municipalities should be made to share information with federal immigration authorities, often focuses on safety, arguments Wednesday before the Third Circuit focused mostly on the limits of the DOJ's authority, both under the specific statute and under the U.S. Constitution.

Katyal told the judges that there was no statutory authority for the DOJ to withhold the money, and that, since the money came from Congress, withholding the money also violates the separation of powers doctrine.

“The program is a mandatory program. The attorney general has very limited discretion under this program,” Katyal said, later adding, “Now they're coming to the court and saying, 'No. We can sweep aside your state and local laws.'”

Katyal urged the panel to uphold U.S. District Judge Michael Baylson of the Eastern District of Pennsylvania's decision from the summer, which had sided with Philadelphia and said withholding the money was unconstitutional.

DOJ attorney Katherine T. Allen, however, said the portion of Baylson's order saying federal authorities need to obtain a judicial warrant before local officials should hand over information about an immigrant's release was an overreach by the court.

“The warrant requirement is being imposed on [the Department of Homeland Security], which is not a party to this case, and not to the grant,” she said, adding that the order wasn't something Philadelphia had been seeking. “There's no basis for the court to impose a judicial warrant requirement, which was clearly one Congress chose not to require.”

Judge Anthony Scirica, who, along with Judges Thomas Ambro and Marjorie Rendell, made up the panel, also said he thought the requirement was “troubling.”

Scirica and Rendell both questioned Allen about whether courts have only sanctioned ministerial, rather than substantive, conditions for grants.

Allen contended that substantive conditions have been allowed, and added that Congress specifically did not want municipalities to be able to work contrary to federal law enforcement efforts.

According to Allen, the stipulations the DOJ has attached to the grant only require information sharing, and do not require local law enforcement to enforce federal law. The fact that the city shares information about an incarcerated immigrant's address, name, whereabouts and fingerprints showed the “oddity” of the city's decision to withhold information about when an immigrant in custody would be released.

“There's no suggestion that the immigrant community would know if a judicial warrant, versus an administrative warrant, was issued,” she said.

Katyal, however, contended that, in most cases, the immigrants are only kept in custody for four to 14 hours, so the DOJ's requirement to provide 48 hours' notice before an immigrant is released would be impossible to comply with. He added that the city is in “substantial compliance” with the broader law enforcement goals of the grant, since not sharing the information has led to greater trust with immigrant communities, which has helped to reduce crime.

“It strikes the appropriate balance for the city,” Katyal said.