Adia Holdings, Inc. v. United States — U.S. Court of Federal Claims, No. 23-623C

Case summary

Adia Holdings, Inc. filed this putative class action against the United States in the U.S. Court of Federal Claims, No. 23-623C, over a Restaurant Revitalization Fund grant. The amended complaint alleges that Adia applied as a priority applicant on May 3, 2021, that the SBA emailed on May 18, 2021 that its application had been approved and would be funded within three to seven business days, that the award amount was $169,820.34, and that the SBA later advised that the award was rescinded. It pleads a single cause of action for breach of contract and seeks damages and an order that the government is equitably estopped from denying the contracts. On March 19, 2024 the court granted the government's second motion to dismiss and dismissed the amended complaint with prejudice, holding that Adia had not alleged facts establishing a contract with the United States.

Case at a glance

What does the complaint allege?

The amended complaint alleges that Adia applied for an RRF grant as a priority applicant on May 3, 2021, the day the SBA opened its application portal, and that on May 18, 2021 the SBA emailed that it had approved the application and would process the funding within three to seven business days, in an award amount of $169,820.34. It alleges that the funds were never disbursed and that the SBA told Adia the award would be rescinded because of orders in Tennessee and Texas lawsuits holding the 21-day priority application program unlawful.

What did the court decide?

On March 19, 2024 Chief Judge Kaplan granted the government's second motion to dismiss under RCFC 12(b)(6), holding that Adia had failed to allege facts sufficient to establish the existence of a contract between itself and the United States, and that equitable estoppel could not be invoked in the absence of a contract. The amended complaint was dismissed with prejudice.

What amounts does the complaint state?

An approved award of $169,820.34, and expenditures the plaintiff says it made in reliance on it, including $22,940.28 for payroll and related expenses, $25,144.52 for cost of goods, $32,508.00 for credit card payments, $126,200 for real estate down payments, $7,233.82 for various check payments and $5,256.41 for furniture. It also states a $382,100 Economic Injury Disaster Loan that Adia must repay to the SBA and estimated losses of at least $500,000.

Summary written from the documents on this page; every sentence is sourced.