Court filing

Complaint for Declaratory and Injunctive Relief and Vacatur — Terre Du Soleil, Ltd. v. United States Small Business Administration (Dkt. 1, D.D.C.)

Summary

A complaint for declaratory and injunctive relief and vacatur by Terre Du Soleil, Ltd., d/b/a Auberge Du Soleil, against the U.S. Small Business Administration and Administrator Kelly Loeffler, Case 1:26-cv-03510, in the U.S. District Court for the District of Columbia, filed October 7, 2026 as Document 1. It challenges the SBA's attempt to treat a fully awarded and disbursed $5,000,000 Restaurant Revitalization Fund grant as a collectible federal debt based on a post-award eligibility interpretation. It states that the business's 2019 food-and-beverage revenue was approximately $14,294,133 of total revenue of approximately $32,197,328, about 44.4 percent, and that it disclosed its integrated restaurant-and-lodging operation. It asks the court to vacate the challenged agency actions.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Filed October 7, 2026 in Terre Du Soleil, Ltd. v. United States Small Business Administration; one of 1 filings from this case.

Record facts

Court	U.S. District Court for the District of Columbia
Filed	2026-10-07

Cite this document

“Complaint for Declaratory and Injunctive Relief and Vacatur — Terre Du Soleil, Ltd. v. United States Small Business Administration (Dkt. 1, D.D.C.).” U.S. District Court for the District of Columbia, No. 1:26-cv-03510, Doc. 1, filed 2026-10-07. Archived at Pandemic Darlings, https://pandemicdarlings.com/court-filings/full-docket-united-states-small-business-administration-dcd-74934336/2026-10-07-gov-uscourts-dcd-74934336-1-0-doc-1/, SHA-256 765632ed5b653916bea426ebbcef9ca1c02cc7da8347a275223ef5cc13b0659b.

Search CourtListener for this docket number

Full text

Case 1:26-cv-03510 Document 1 Filed 10/07/26 Page 1 of 29

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

TERRE DU SOLEIL, LTD. Civil Action No.: _____________________
d/b/a AUBERGE DU SOLEIL,
180 Rutherford Hill Rd,
Rutherford, CA 94573
COMPLAINT FOR DECLARATORY AND
Plaintiff, INJUNCTIVE RELIEF AND VACATUR

UNITED STATES SMALL BUSINESS
ADMINISTRATION;
KELLY LOEFFLER, in her official
capacity as Administrator of the United
States Small Business Administration; and
UNITED STATES OF AMERICA,

Defendants.
_____________________________________

COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF AND VACATUR
PURSUANT TO THE ADMINISTRATIVE PROCEDURE ACT

Plaintiff, Terre du Soleil, Ltd. d/b/a Auberge du Soleil (“Auberge”), by and through

undersigned counsel, brings this action against the United States Small Business Administration

(“SBA”), the Administrator of the SBA, Kelly Loeffler, in her official capacity, and the United

States of America (collectively, “Defendants”), and alleges as follows.

I. NATURE OF THE ACTION

1. This action challenges SBA’s attempt to transform a fully awarded, disbursed, and reported

$5,000,000 Restaurant Revitalization Fund (“RRF”) grant into an immediately collectible federal

debt based on a post-award eligibility interpretation that is contrary to the governing statute,

inconsistent with the eligibility standard SBA announced to applicants, and unexplained in light

of the information SBA possessed when it approved Auberge’s application.

Case 1:26-cv-03510 Document 1 Filed 10/07/26 Page 2 of 29

2. Congress expressly included an “inn” within the statutory definition of an eligible RRF

entity. 15 U.S.C. § 9009c(a)(4). SBA publicly implemented that provision by stating that inns

qualified when onsite sales of food and beverage to the public comprised at least 33 percent of

gross receipts. See U.S. Small Bus. Admin., Restaurant Revitalization Fund Program Guide,

Eligibility—Eligible Entities (Apr. 2021); U.S. Small Bus. Admin., Restaurant Revitalization

Fund, “Who can apply.” Auberge exceeded that announced test: its 2019 food-and-beverage

revenue was approximately $14,294,133 out of total revenue of approximately $32,197,328, or

approximately 44.4 percent.

3. Auberge disclosed its integrated restaurant-and-lodging business structure during the

application process, including that the operations shared a single Employer Identification Number

(“EIN”). See Exhibit A attached hereto. SBA nevertheless approved the application and disbursed

the maximum $5,000,000 award. Auberge then relied on that approval, used the funds for eligible

expenses during the covered period, and completed required post-award reporting.

4. Nearly five years later, SBA demanded repayment of the entire award, not because

Auberge failed the 33-percent test, misused grant proceeds, failed to spend them, concealed its

structure, or made a false certification, but because SBA now asserts that a restaurant associated

with a hotel or motel must have a separate tax identification number. The RRF statute contains no

such separate-EIN requirement for an inn.

5. On or about April 24, 2026, Auberge received a Return of Funds notice from SBA

demanding that it return the $5 million RRF grant. The notice provided that Auberge may seek

reconsideration of the claw back. See Exhibit B attached hereto. Auberge timely sought

reconsideration on May 22, 2026 and supplied evidence and legal argument addressing its statutory

eligibility, its satisfaction of SBA’s announced 33-percent standard, its disclosures, and SBA’s

Case 1:26-cv-03510 Document 1 Filed 10/07/26 Page 3 of 29

prior approval. See Exhibit C attached hereto (without original exhibits included). SBA adhered

to the recoupment determination and, on July 9, 2026, advised Auberge that it “cannot reconsider

its decision.” See Exhibit D attached hereto.

6. While Auberge’s timely reconsideration request remained pending, SBA issued a June 16,

2026 debt notice treating the recoupment amount as subject to federal collection. See Exhibit E

attached hereto. After SBA issued its July 9 reconsideration response, Auberge filed a debt appeal

with SBA’s Office of Hearings and Appeals (“OHA”) on July 22, 2026. On August 27, 2026, OHA

dismissed the appeal on procedural timeliness grounds, measuring the 15-day appeal period from

Auberge’s receipt of the June 16 debt notice rather than from SBA’s later reconsideration response.

See Exhibit F attached hereto (without original exhibits included). OHA did not decide Auberge’s

RRF eligibility or the merits of SBA’s separate-EIN theory, and it observed that whether an RRF

reconsideration determination may be challenged through a debt appeal had not been resolved.

7. The administrative process has therefore ended without any merits adjudication of SBA’s

new eligibility theory. SBA’s April 24, 2026 Return of Funds determination and July 9, 2026

reconsideration decision maintaining that determination (collectively, the “Challenged Agency

Actions”) mark the consummation of SBA’s decision-making process: they definitively determine

Auberge’s asserted repayment obligation and expose Auberge to immediate collection

consequences. OHA’s later procedural dismissal on August 27 neither reopened nor displaced

those final determinations. The Challenged Agency Actions are therefore final agency action

reviewable under the Administrative Procedure Act (“APA”), 5 U.S.C. §§ 701–706.

8. Auberge seeks an order holding unlawful and vacating the Challenged Agency Actions; a

declaration that SBA may not treat the $5,000,000 award as a past-due, legally enforceable debt

on the asserted grounds; and preliminary and permanent relief preserving the status quo and

Case 1:26-cv-03510 Document 1 Filed 10/07/26 Page 4 of 29

preventing collection. Vacatur is necessary to eliminate the legal consequences of SBA’s unlawful

determinations rather than merely postpone collection of an asserted debt that should not exist.

II. JURISDICTION AND VENUE

9. This Court has subject-matter jurisdiction under 28 U.S.C. § 1331 because this action arises

under the APA, 5 U.S.C. §§ 701-706, the American Rescue Plan Act of 2021(establishing the RRF

Program), including 15 U.S.C. § 9009c, and federal debt-collection law.

10. The APA authorizes judicial review of final agency action for which there is no other

adequate remedy in a court and waives sovereign immunity for claims seeking relief other than

money damages. 5 U.S.C. §§ 702, 704. Auberge seeks vacatur, declaratory relief, and prospective

equitable relief (e.g., estoppel of any collection activities), not compensatory money damages.

11. The Challenged Agency Actions are final within the meaning of 5 U.S.C. § 704 and Bennett

v. Spear, 520 U.S. 154, 177–78 (1997) (holding that agency action is final when it marks the

consummation of the agency’s decision-making process and determines rights or obligations or

produces legal consequences). SBA’s April 24, 2026 Return of Funds determination, as maintained

on July 9, 2026, consummated SBA’s decision-making on Auberge’s RRF eligibility and

repayment obligation, and SBA stated that it could not reconsider the decision. Those

determinations impose direct legal consequences by treating $5,000,000 as immediately repayable

and subject to federal collection. See U.S. Army Corps of Engineers v. Hawkes Co., 578 U.S. 590,

597–600 (2016) (holding an agency determination final and immediately reviewable where it

definitively resolved the agency’s position and produced direct and appreciable legal

consequences, without requiring the regulated party to await enforcement). OHA’s August 27,

2026 procedural dismissal did not adjudicate, alter, or reopen the merits of those determinations.

Case 1:26-cv-03510 Document 1 Filed 10/07/26 Page 5 of 29

12. Auberge pursued all of the administrative avenues SBA made available. No further

administrative process remains that can provide merits review or suspend the collection

consequences of the Challenged Agency Actions, and no other adequate remedy in a court would

provide the record-based review and vacatur available under the APA.

13. This Court may grant declaratory relief under 28 U.S.C. §§ 2201-2202 and may postpone

the effective date of agency action or preserve status or rights pending judicial review under 5

U.S.C. § 705. The Court also has authority to issue preliminary and permanent injunctive relief

under Federal Rule of Civil Procedure 65 and its equitable powers.

14. Venue is proper in this District under 28 U.S.C. § 1391(e)(1) because SBA resides in this

District and the challenged federal agency action was taken by an agency headquartered in

Washington, D.C.

III. PARTIES

15. Plaintiff, Terre du Soleil, Ltd., d/b/a Auberge du Soleil, is a California limited partnership

that owns and operates a restaurant-centered inn and hospitality business in Rutherford, California.

16. Defendant, United States Small Business Administration, is an agency of the United States

charged with administering the RRF program and is responsible for the recoupment,

reconsideration, and collection actions challenged here.

17. Defendant, Kelly Loeffler, is the Administrator of SBA and is sued solely in her official

capacity.

18. Defendant, United States of America, is named because Auberge seeks declaratory and

equitable relief against the United States and its agency.

Case 1:26-cv-03510 Document 1 Filed 10/07/26 Page 6 of 29

IV. FACTUAL ALLEGATIONS
19. Auberge began as a restaurant in 1981 and later added lodging and resort components. Its

food-and-beverage operations remain a substantial, public-facing component of the enterprise

rather than merely a captive amenity for overnight guests.

20. Congress created the RRF in 2021 to provide grants to eligible food-and-beverage

businesses affected by the COVID-19 pandemic. The statutory definition of “eligible entity”

expressly includes an “inn.” 15 U.S.C. § 9009c(a)(4).

21. In the eligibility guidance SBA published to RRF applicants, SBA stated that “inns” were

eligible when onsite sales of food and beverage to the public comprised at least 33 percent of gross

receipts. See U.S. Small Bus. Admin., Restaurant Revitalization Fund Program Guide,

Eligibility—Eligible Entities (Apr. 2021); U.S. Small Bus. Admin., Restaurant Revitalization

Fund, “Who can apply.”

22. Auberge satisfied that announced eligibility standard. Its 2019 records reflected

approximately $32,197,328 in total revenue and approximately $14,294,133 in food-and-beverage

revenue, resulting in food-and-beverage revenue of approximately 44.4 percent of gross receipts.

See Auberge 2019 financial records submitted to SBA, attached hereto as Exhibit G.

23. In 2021, Auberge applied for an RRF grant. SBA assigned Confirmation ID b89900115444

and SBA Loan/Award No. 9948439003.

24. During the application process, Auberge provided financial and operational information

concerning the integrated business. Auberge disclosed that its lodging and restaurant operations

operated under a single EIN. SBA did not tell Auberge that this disclosed structure rendered it

ineligible as an inn. See Auberge RRF application and supporting materials, Confirmation ID

b89900115444, SBA Loan/Award No. 9948439003.

Case 1:26-cv-03510 Document 1 Filed 10/07/26 Page 7 of 29

25. After reviewing Auberge’s submission, SBA approved the application and disbursed

$5,000,000. See SBA award and disbursement records for Loan/Award No. 9948439003.

26. The COVID-19 pandemic materially impaired Auberge’s operations and revenues,

including its substantial public-facing food-and-beverage business. Auberge’s RRF application

documented pandemic-related revenue loss through the gross-receipts information and supporting

financial records required by the program. See Auberge RRF application and supporting financial

records, Confirmation ID b89900115444, SBA Loan/Award No. 9948439003, attached hereto as

Exhibit H.

27. In its application, Auberge certified that then-current economic uncertainty made the

requested funding necessary to support its ongoing or anticipated operations. SBA reviewed

Auberge’s application and supporting financial information, accepted that certification, and

approved the award based on the pandemic-related revenue-loss information Auberge submitted.

See Auberge RRF application and certifications; SBA award and disbursement records for

Loan/Award No. 9948439003.

28. In reliance on SBA’s approval, Auberge used the RRF proceeds during the covered period

for expenses authorized by 15 U.S.C. § 9009c(c)(5) and submitted the required use-of-funds

reporting and supporting financial information to SBA. The reported expenditures totaled the full

$5,000,000 award and were incurred for authorized expenses within the covered period. See

Auberge RRF use-of-funds reports and supporting financial records submitted to SBA.

29. SBA does not allege that Auberge failed to sustain pandemic-related revenue loss, lacked

economic need when it applied, committed fraud, concealed its integrated structure, made a false

certification, misused RRF funds, retained unused funds after the covered period, or failed to

satisfy the covered-period spending or reporting requirements. SBA’s repayment demand instead

Case 1:26-cv-03510 Document 1 Filed 10/07/26 Page 8 of 29

rests on its new position concerning Auberge’s previously disclosed common EIN. See SBA

Return of Funds Letter to Auberge (Apr. 24, 2026), Exhibit B.

30. The RRF program was designed and launched on an exceptionally compressed schedule.

Congress enacted the program on March 11, 2021; SBA’s final Program Guide was effective April

28, 2021; and SBA opened the application portal on May 3, 2021—only five days later. Within

the first two days, SBA received more than 186,000 applications, and within the first week it

approved more than 16,000 awards totaling over $2 billion. See SBA, Restaurant Revitalization

Fund Program Guide (effective Apr. 28, 2021), attached as Exhibit I; SBA, Administrator

Announces Initial Results of Restaurant Revitalization Fund (May 6, 2021), attached as Exhibit J;

SBA, The SBA Funds 16,000 Restaurant Revitalization Fund Awards (May 10, 2021), attached as

Exhibit K.

31. SBA promoted the application process as streamlined and free of burdensome bureaucratic

hurdles, while simultaneously advising that its staff were limited in answering applicant-specific

questions about eligibility, potential award amounts, and other details. The public-facing materials

directed applicants principally to a short Program Guide, a knowledge base, webinars, and a call

center. Those materials identified inns as eligible under the 33-percent food-and-beverage test but

did not state that a qualifying inn’s restaurant operations had to use an EIN separate from its

lodging operations. See SBA, SBA Announces Official Restaurant Revitalization Fund Application

and Guidelines (Apr. 19, 2021), Exhibit L; SBA, Restaurant Revitalization Fund, “Get help with

your application” and “Who can apply.”, Exhibit M.

32. Subsequent independent reviews confirmed that the program’s speed was not matched by a

coherent or validated control structure. In July 2022, the Government Accountability Office found

systemic weaknesses in SBA’s RRF controls, reported that SBA had not assessed the effectiveness

Case 1:26-cv-03510 Document 1 Filed 10/07/26 Page 9 of 29

of its pre-award controls, and recommended that SBA evaluate and correct those deficiencies and

take additional steps to identify potentially fraudulent or ineligible awards. See U.S. Gov’t

Accountability Off., Restaurant Revitalization Fund: Opportunities Exist to Improve Oversight,

GAO-22-105442 (July 2022), attached as Exhibit N.

33. SBA did not publish a conventional, consolidated agency FAQ addressing recurring

substantive eligibility questions before the portal opened. Instead, applicants were directed to a

short Program Guide, a sample application, a separate online knowledge base, recorded webinars,

and a call center whose staff SBA expressly said were limited in answering specific eligibility

questions. Industry associations filled the resulting gap by publishing and repeatedly updating their

own FAQs as SBA released new information. Those contemporaneous industry materials repeated

the 33-percent gross-receipts test for inns and likewise did not identify a separate-EIN condition

for an inn’s restaurant operations. See SBA, Restaurant Revitalization Fund, “Get help with your

application”; National Restaurant Association, Frequently Asked Questions: Restaurant

Revitalization Grants (Apr. 2021).

34. In March 2024, SBA’s Office of Inspector General likewise concluded that SBA’s

implementation plan omitted program requirements, SBA did not always follow its own plan, and

the agency lacked sufficient controls to ensure that applicants met statutory and program

requirements. The Inspector General estimated that SBA had disbursed nearly $6.7 billion without

sufficiently verifying eligibility and expressly recommended that SBA review previously approved

awards and recover funds from recipients SBA later determined did not satisfy eligibility

requirements or exceeded statutory limits. See SBA Office of Inspector General, SBA’s Restaurant

Revitalization Fund Program Award Practices, Report 24-09 (Mar. 26, 2024), attached as Exhibit

O. SBA’s April 2026 demand against Auberge is the precise type of retrospective award review

Case 1:26-cv-03510 Document 1 Filed 10/07/26 Page 10 of 29

and recovery action the Inspector General recommended: SBA revisited a grant it had approved

and fully disbursed, reclassified the recipient as ineligible, and demanded return of the entire

award. But SBA did so without identifying any newly discovered fact, fraud, concealment, misuse,

or statutory ineligibility and without explaining why its own acknowledged pre-award control

failures warranted imposing a $5,000,000 loss on Auberge.

35. The chronology and asserted basis of SBA’s demand connect the agency’s acknowledged

oversight failures to Auberge’s claw back. In 2021, SBA chose a rapid rollout, supplied fragmented

guidance, limited applicant-specific answers, reviewed Auberge’s disclosed integrated operations

and common EIN, approved the award, and accepted Auberge’s use-of-funds reporting. In 2022

and 2024, GAO and SBA’s Inspector General criticized SBA’s eligibility controls, and the

Inspector General directed SBA to review completed awards and pursue recovery. In 2026, SBA

did exactly that to Auberge but used the same common-EIN fact it possessed before approval as

the basis for retroactively declaring the award ineligible. The challenged claw back therefore did

not arise from any intervening conduct by Auberge; it arose from SBA’s later reexamination of its

own earlier approval under a separate-EIN criterion that had not appeared in the statute, the

published eligibility list, the inn-specific 33-percent test, or the applicant-facing materials.

36. On April 24, 2026, nearly five years after approving Auberge’s application, SBA issued a

Return of Funds letter demanding repayment of the entire $5,000,000 award. See SBA Return of

Funds Letter to Auberge (Apr. 24, 2026), Exhibit B.

37. SBA stated, in substance, that hotels and motels are not eligible entities, that a restaurant

within a hotel or motel must possess a separate tax identification number, and that Auberge’s

common EIN prevented SBA from separating its restaurant operation from its lodging operation

for eligibility purposes. See id.

Case 1:26-cv-03510 Document 1 Filed 10/07/26 Page 11 of 29

38. SBA’s rationale did not apply the 33-percent standard it had announced for inns, did not

identify any statutory text making a separate EIN an eligibility criterion, and did not explain why

Congress’s express inclusion of an “inn” could be displaced by relabeling Auberge as a hotel or

motel based solely on the same integrated structure SBA knew when it approved the application.

39. The RRF statute does not require a qualifying inn to maintain separate EINs for its

restaurant and lodging operations. Nor does the statute authorize SBA to convert its ability to

administratively distinguish business components into a substantive condition of eligibility that

Congress did not enact. See 15 U.S.C. § 9009c(a)(4).

40. SBA identified no post-award change in Auberge’s ownership, organizational structure,

EIN, food-and-beverage operations, or use of funds that could justify a different eligibility

determination. The fact SBA now treats as dispositive was disclosed before approval, and SBA

approved the award without warning Auberge that the common EIN created any eligibility defect.

41. Auberge disputed the repayment demand by letter dated May 22, 2026 and supplemented

its submission by email dated June 12, 2026. Auberge explained, among other things, that it

qualified as an inn, exceeded SBA’s 33-percent threshold, had disclosed its business structure to

SBA, and had used the grant for authorized expenses. See Auberge Request for Reconsideration

(May 22, 2026), Exhibit C; Auberge Supplemental Reconsideration Submission (June 12, 2026),

Exhibit P.

42. SBA nevertheless maintained the demand. By email dated July 9, 2026, SBA stated that it

“cannot reconsider its decision.” In attempting to justify that determination, SBA further asserted

that its “upfront program rules for RRF” provided: “Eligible entities include any of the above

entities located in an airport terminal or that operate independently (i.e. has its own tax

identification number) inside another business (e.g. a restaurant that operates independently inside

Case 1:26-cv-03510 Document 1 Filed 10/07/26 Page 12 of 29

a hotel or conference center) or that are a Tribally owned concern.” SBA then stated: “It was clear

that the restaurant had to have its own EIN and operate separately.” See SBA Reconsideration

Email to Auberge (July 9, 2026), Exhibit D.

43. SBA’s reliance on that language did not address the eligibility category under which Auberge

qualified. Auberge did not seek eligibility on the theory that it was a restaurant operating

independently “inside another business.” Auberge qualified as an “inn,” a category Congress

expressly included in the statutory definition of an eligible entity. SBA’s applicant-facing guidance

separately addressed inns and provided a specific eligibility test for them: onsite sales of food and

beverage to the public had to comprise at least 33 percent of gross receipts. Auberge exceeded that

threshold, with approximately 44.4 percent of its 2019 gross receipts attributable to food-and-

beverage revenue.

44. The distinction is material. The language quoted by SBA concerns when an eligible food-

and-beverage establishment located “inside another business” may qualify independently from the

surrounding business, illustrated by a restaurant operating independently inside a hotel or

conference center. Nothing in the quoted language states that an inn, itself expressly eligible under

the statute and subject to SBA’s separate 33-percent test, must divide its restaurant and lodging

operations into separate tax-identification numbers. SBA thus treated a provision addressing an

independently operated establishment within another business as though it imposed an additional

eligibility condition on the integrated operations of an inn, without identifying the textual or legal

basis for doing so.

45. SBA also did not explain how its assertion that the separate-EIN requirement was “clear”

could be reconciled with its approval of Auberge’s application after Auberge disclosed the

organizational structure and common EIN SBA later deemed disqualifying. SBA identified no

Case 1:26-cv-03510 Document 1 Filed 10/07/26 Page 13 of 29

misrepresentation, concealment, or intervening change in Auberge’s structure. If, as SBA asserted

in 2026, the common EIN clearly rendered Auberge ineligible under rules existing when it applied,

SBA possessed the information necessary to make that determination before approving and

disbursing the award. The July 9 response did not explain that inconsistency, why the “inside

another business” provision governed Auberge rather than the inn-specific eligibility standard, or

how SBA accounted for Auberge’s completed performance and reliance on the agency’s approval.

46. While Auberge’s reconsideration request remained pending, SBA issued a June 16, 2026

Notice of Debt treating the $5,000,000 recoupment amount as subject to federal collection and

identifying potential consequences including administrative offset, referral for collection, and

associated interest, penalties, fees, and credit-reporting consequences as applicable. See SBA

Notice of Debt to Auberge (June 16, 2026), Exhibit E. The debt notice preceded SBA’s July 9

response maintaining the underlying recoupment determination.

47. After SBA issued its July 9 reconsideration response, Auberge filed an OHA debt appeal

on July 22, 2026. On August 27, 2026, OHA dismissed the appeal solely on procedural timeliness

grounds. OHA measured the 15-day debt-appeal period from Auberge’s receipt of the June 16 debt

notice and concluded that SBA’s later reconsideration response did not restart that period. See

OHA Order of Dismissal (Aug. 27, 2026).

48. OHA did not adjudicate Auberge’s statutory eligibility, SBA’s separate-EIN theory, or the

lawfulness of the underlying recoupment determination. OHA also observed that it had not

resolved whether an RRF reconsideration determination may be challenged through a debt appeal.

Auberge does not include the OHA dismissal within the defined Challenged Agency Actions; the

order is relevant because it left the April 24 recoupment determination and July 9 reconsideration

Case 1:26-cv-03510 Document 1 Filed 10/07/26 Page 14 of 29

response undisturbed and supplied no administrative merits review of the asserted debt. See OHA

Order of Dismissal (Aug. 27, 2026).

49. As a result, the agency process has produced a $5,000,000 collection demand without an

administrative merits adjudication of Auberge’s challenge to the underlying recoupment theory.

50. The asserted debt and threatened collection expose Auberge to concrete and ongoing

financial and operational harm. The administrative process has concluded: SBA has stated that it

cannot reconsider the repayment determination, OHA has dismissed Auberge’s debt appeal, and

no administrative stay presently protects Auberge from collection. SBA has already treated the full

$5,000,000 as a collectible federal debt and has identified administrative offset, referral for

collection, interest, penalties, fees, reporting consequences, and related collection measures as

potential consequences. Collection therefore does not depend on any further merits adjudication

of Auberge’s eligibility challenge.

51. Absent judicial relief preserving the status quo, SBA may certify or refer the asserted debt

for collection, pursue administrative offset, report the obligation as delinquent, or impose

collection-related charges before this Court can adjudicate the legality of the Challenged Agency

Actions. Immediate collection of $5,000,000 would materially impair Auberge’s liquidity and

could impair existing financing relationships, compliance with financial covenants, planned capital

expenditures, and ordinary business operations. Auberge will support these injuries, including the

magnitude and timing of the threatened liquidity and financing consequences, through declarations

and contemporaneous financial records submitted with any motion under 5 U.S.C. § 705 or Rule

65.

Case 1:26-cv-03510 Document 1 Filed 10/07/26 Page 15 of 29

V. CAUSES OF ACTION

COUNT I - IMMINENT COLLECTION, IRREPARABLE HARM, AND
PRESERVATION OF THE STATUS QUO

52. SBA has completed its consideration of Auberge’s challenge. SBA stated on July 9, 2026

that it “cannot reconsider its decision,” and OHA dismissed Auberge’s administrative appeal on

August 27, 2026. No administrative merits proceeding remains pending, and no administrative

stay presently prevents SBA from acting on the debt notice.

53. SBA’s June 16, 2026 Notice of Debt treats the full $5,000,000 as subject to federal collection

and identifies administrative offset, referral, interest, penalties, fees, and other collection

consequences. Thus, collection may proceed without any further agency adjudication of the

statutory eligibility issue presented here.

54. Auberge timely invoked SBA’s reconsideration procedure before SBA issued the Notice of

Debt. Yet SBA issued the debt notice while reconsideration remained pending; after SBA denied

reconsideration on July 9, Auberge promptly appealed to OHA; and OHA then measured its

separate 15-day appeal period from the earlier debt notice and dismissed the appeal without

reaching the merits. The result is that SBA treated the alleged obligation as collectible before

completing reconsideration, while the administrative process ultimately supplied no merits

adjudication of the legal and factual objections that Auberge had timely presented.

55. SBA has never made a reasoned finding that Auberge was not an “inn” within 15 U.S.C. §

9009c(a)(4), never found that Auberge failed the published 33-percent food-and-beverage test

applicable to inns, and never identified a contemporaneous statutory provision, regulation,

Program Guide provision, application instruction, award condition, or other applicant-facing rule

making a separate EIN a condition of an inn’s eligibility. Nor did SBA explain whether its

Case 1:26-cv-03510 Document 1 Filed 10/07/26 Page 16 of 29

separate-EIN criterion existed when Auberge applied in 2021 or instead arose during later post-

award review.

56. Auberge’s status as an inn and the public-facing character of its food-and-beverage

operations are independently demonstrated by its history and operations. Auberge began as a

restaurant before lodging was added; its restaurant remained a substantial component of the

integrated enterprise; and its 2019 food-and-beverage revenue represented approximately 44.4

percent of total gross receipts. To the extent reflected in the administrative record, Auberge’s

contemporaneous application materials, financial records, marketing materials, reservation

practices, patron information, and other operational evidence further demonstrate that its food-

and-beverage operations served the public and were not merely a captive amenity for overnight

lodging guests.

57. Immediate collection of $5,000,000 during judicial review would impose consequences that

cannot adequately be remedied merely by a later declaration concerning the legality of SBA’s

action. In addition to the immediate loss of substantial liquidity, collection threatens concrete

financing, credit, covenant, capital-planning, and operational consequences. Auberge will

establish the specific magnitude and imminence of those consequences through declarations and

supporting financial records in connection with its request for interim relief.

58. Interim relief would preserve, rather than alter, the longstanding status quo. SBA approved

and disbursed the grant in 2021, Auberge used the proceeds for authorized expenses during the

covered period, and SBA waited nearly five years before demanding repayment. A temporary

postponement of collection while this Court conducts expedited review of the administrative

record would protect Auberge against irreversible collection consequences without preventing the

Government from pursuing any obligation that remains legally enforceable after final judgment.

Case 1:26-cv-03510 Document 1 Filed 10/07/26 Page 17 of 29

COUNT II - VIOLATION OF THE APA: ARBITRARY AND CAPRICIOUS ACTION,
UNEXPLAINED REVERSAL, LACK OF FAIR NOTICE, AND PROCEDURAL ERROR

59. Auberge incorporates the preceding paragraphs as though fully set forth herein.

60. Under 5 U.S.C. § 706(2)(A), a reviewing court shall hold unlawful and set aside agency

action that is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.

61. SBA was required to examine the relevant information and articulate a satisfactory

explanation connecting the facts found to the decision made. It was also required to address

important aspects of the problem presented by Auberge’s reconsideration submission. Motor

Vehicle Manufacturers Ass’n v. State Farm Mutual Automobile Insurance Co., 463 U.S. 29, 43

(1983) (holding agency action arbitrary and capricious where the agency failed to consider an

important aspect of the problem, offered an explanation contrary to the evidence, or failed to

articulate a rational connection between the facts found and the choice made). And the Challenged

Agency Actions may be sustained, if at all, only on the grounds SBA invoked when it acted—not

on post hoc rationales supplied in litigation. SEC v. Chenery Corp., 318 U.S. 80, 87, 94–95 (1943)

(holding that an agency order must stand or fall on the grounds invoked by the agency and cannot

be upheld on findings or rationales the agency might have adopted but did not).

62. SBA failed to engage in reasoned decision-making because it neither applied the rule

governing the statutory category under which Auberge qualified nor explained why that rule

ceased to control. The determination did not meaningfully address Congress’s express inclusion

of inns; Auberge’s approximately 44.4-percent food-and-beverage revenue; SBA’s announced 33-

percent eligibility standard for inns; Auberge’s disclosure of the common EIN before approval;

SBA’s approval on those disclosed facts; Auberge’s compliant expenditure and reporting of the

full award; the absence of fraud, concealment, misuse, or changed circumstances; or the evidence

and arguments Auberge presented in its May 22 and June 12 reconsideration submissions. Nor did

Case 1:26-cv-03510 Document 1 Filed 10/07/26 Page 18 of 29

SBA identify any factual finding that Auberge was not an inn, any defect in Auberge’s revenue

calculation, or any connection between the common EIN and the statutory eligibility criteria. By

substituting an administrative labeling rule for analysis of the statutory category and record

evidence, SBA failed to consider central aspects of the problem and failed to articulate a rational

connection between the facts found and the full $5,000,000 repayment demand.

63. SBA’s July 9 explanation does not cure these defects. The language SBA invoked addresses

eligible establishments that operate independently “inside another business,” illustrated by “a

restaurant that operates independently inside a hotel or conference center.” SBA did not explain

why that provision governed Auberge instead of the specific eligibility provision for inns, or why

an inn satisfying SBA’s 33-percent food-and-beverage threshold must additionally establish that

its restaurant is a separately identified business operating “inside” the inn. SBA therefore failed to

explain why a provision addressing one organizational arrangement displaced the eligibility

standard it specifically announced for the statutory category to which Auberge belonged.

64. SBA also reversed its treatment of the same disclosed organizational fact without

acknowledging the change, identifying any new evidence, explaining why its prior approval was

erroneous, or accounting for the serious reliance interests its approval created. The original

approval necessarily treated Auberge’s disclosed integrated structure and common EIN as

compatible with eligibility; the 2026 determination treated that identical fact as categorically

disqualifying. Auberge could not unspend the grant after using it for authorized pandemic-period

expenses, restructure its historical operations retroactively, or seek substitute relief after the RRF

was exhausted. The five-year delay therefore magnified, rather than diminished, the reliance

interests SBA was required to confront. See FCC v. Fox Television Stations, Inc., 556 U.S. 502,

515–16 (2009) (requiring awareness of a changed position and a more detailed justification when

Case 1:26-cv-03510 Document 1 Filed 10/07/26 Page 19 of 29

prior policy engendered serious reliance interests); Department of Homeland Security v. Regents

of the University of California, 591 U.S. 1, 30–33 (2020) (holding rescission arbitrary and

capricious where the agency failed to assess and weigh reliance interests); Encino Motorcars, LLC

v. Navarro, 579 U.S. 211, 221–22 (2016) (holding an inadequately explained policy reversal

arbitrary and capricious).

65. The separate-EIN criterion, as applied to Auberge, also lacked fair notice and was

impermissibly applied retroactively. When Auberge applied, the statute expressly identified inns

as eligible, and SBA told inns to measure whether onsite food-and-beverage sales to the public

comprised at least 33 percent of gross receipts. Although SBA guidance referred to a separate tax-

identification number in describing a restaurant or other eligible establishment operating

independently “inside another business,” neither that language nor the inn-specific eligibility

guidance stated that an inn satisfying the 33-percent test was required to maintain a separate EIN

for its restaurant and lodging components. SBA’s 2026 determination transformed the former

provision into an additional substantive condition on the eligibility of inns and attached a

$5,000,000 consequence to conduct completed years earlier in reliance on SBA’s approval. See

Christopher v. SmithKline Beecham Corp., 567 U.S. 142, 155–56 (2012) (declining deference

where a newly announced interpretation would impose massive retroactive liability without fair

warning); General Electric Co. v. EPA, 53 F.3d 1324, 1328–30 (D.C. Cir. 1995) (vacating liability

imposed without fair warning); Bowen v. Georgetown University Hospital, 488 U.S. 204, 208–09

(1988) (holding that agencies lack retroactive rulemaking authority absent express congressional

authorization).

66. SBA’s action is unlawful under either possible characterization of the separate-EIN

criterion. If SBA treated it as a binding substantive eligibility rule of general applicability, the

Case 1:26-cv-03510 Document 1 Filed 10/07/26 Page 20 of 29

criterion altered the rights and obligations of inns, supplied the sole basis for a multi-million-dollar

repayment obligation, and was not adopted through the procedure required for a legislative rule. If

SBA instead characterizes it as an interpretation announced through adjudication, SBA failed to

justify applying that undisclosed interpretation retroactively to Auberge despite contrary applicant-

facing guidance, full disclosure, prior approval, completed performance, and settled reliance. And

under either characterization, SBA compounded the defect by responding to Auberge’s material

evidence and legal objections only with the unexplained statement that it “cannot reconsider its

decision,” without findings, analysis, or an explanation capable of judicial review. See SEC v.

Chenery Corp., 332 U.S. 194, 196–97 (1947) (requiring the agency to disclose the grounds for its

action).

67. The record, as presently known, does not support SBA’s dispositive characterization of

Auberge as an ineligible hotel or motel. It shows that Auberge exceeded SBA’s published

threshold for inns, disclosed its integrated operations and common EIN, received approval, and

used the award for authorized expenses. SBA identified no fraud, concealment, misuse, changed

fact, erroneous award calculation, or statutory provision establishing that the common EIN

defeated eligibility. Those evidentiary defects demonstrate arbitrary and capricious action under §

706(2)(A) and, to the extent § 706(2)(E) applies, findings unsupported by substantial evidence.

68. SBA’s compressed rollout, fragmented guidance, limited applicant-specific answers, and

unvalidated pre-award controls reinforce the absence of a reasoned nexus between the later

oversight concerns and the full claw back imposed on Auberge. After GAO and the Inspector

General criticized SBA’s program-wide controls and the Inspector General recommended

retrospective review and recovery, SBA revisited Auberge’s completed award and treated the same

common-EIN fact it possessed before approval as newly dispositive. But the identified oversight

Case 1:26-cv-03510 Document 1 Filed 10/07/26 Page 21 of 29

failures concerned SBA’s own verification and control processes; SBA did not explain how

Auberge’s disclosed EIN caused or concealed an eligibility defect, why the 33-percent inn test was

insufficient, or why full repayment rather than any narrower corrective measure followed from the

cited concern. Moving directly from program-wide criticism to a recipient-specific $5,000,000

claw back, without identifying fraud, concealment, misuse, new evidence, or violation of a

contemporaneous rule, shifted the consequences of SBA’s deficient review to the recipient without

reasoned justification. The Challenged Agency Actions are therefore arbitrary, capricious, an

abuse of discretion, unsupported by the record, adopted without observance of required procedure,

and must be held unlawful and set aside under 5 U.S.C. § 706(2)(A), (D), and, to the extent

applicable, (E).

COUNT III - VIOLATION OF THE APA: CONTRARY TO LAW AND IN EXCESS OF
STATUTORY AUTHORITY
69. Auberge incorporates the preceding paragraphs as though fully set forth herein.

70. The APA requires the Court to set aside agency action that is not in accordance with law

or exceeds statutory jurisdiction, authority, or limitations. 5 U.S.C. § 706(2)(A), (C). In deciding

whether SBA acted within the authority Congress granted, the Court must exercise its own

independent judgment and determine the best reading of 15 U.S.C. § 9009c. The question is not

whether SBA’s separate-EIN interpretation is a reasonable response to perceived ambiguity;

statutory ambiguity does not transfer interpretive authority from the Court to SBA. See Loper

Bright Enterprises v. Raimondo, 603 U.S. 369, 400, 412–13 (2024) (holding that the APA requires

courts to exercise independent judgment on questions of statutory meaning and forbids deference

to an agency interpretation merely because the statute is ambiguous).

71. The best reading of § 9009c includes Auberge within the statutory category Congress

chose. Congress expressly made an “inn” an eligible entity and separately enacted specific

Case 1:26-cv-03510 Document 1 Filed 10/07/26 Page 22 of 29

exclusions and eligibility limitations, demonstrating that it knew how to withhold eligibility when

it wished to do so. It did not require a qualifying inn to divide its restaurant and lodging operations

among separate legal entities or EINs, and it did not authorize SBA to substitute a tax-identifier

requirement for the statutory category. Reading an unwritten separate-EIN condition into the

statute would narrow “inn,” substantially impair the express inclusion of integrated inn operations,

and add a restriction Congress did not enact.

72. Nothing in § 9009c delegates to SBA authority to redefine “inn” through an EIN-based

limitation, and statutory silence concerning EINs is not such a delegation. Any discretion to

administer applications, verify revenue, or distinguish eligible from ineligible businesses remains

bounded by the categories and conditions Congress enacted. SBA may choose reasonable

procedures for determining whether an applicant is an inn and satisfies the governing revenue test;

it may not resolve an administrative-processing difficulty by replacing those statutory criteria with

a materially narrower rule. See Utility Air Regulatory Group v. EPA, 573 U.S. 302, 325–28 (2014)

(rejecting an agency interpretation that rewrote statutory terms to make a regulatory program

function as the agency preferred).

73. Auberge qualifies under that best reading. It operates a restaurant-centered inn whose onsite

food-and-beverage revenue to the public comprised approximately 44.4 percent of gross receipts—

more than eleven percentage points above SBA’s announced 33-percent threshold. SBA did not

find that those sales were ineligible or inaccurately reported. Its asserted inability to separate

business components under a common EIN is therefore an administrative preference, not a

permissible construction of the statute. By making the common EIN dispositive notwithstanding

Auberge’s satisfaction of the statutory category and every eligibility criterion SBA identified for

inns, SBA imposed an extra-statutory bar and exceeded the authority Congress conferred.

Case 1:26-cv-03510 Document 1 Filed 10/07/26 Page 23 of 29

74. The language SBA invoked in its July 9 decision confirms rather than cures the statutory

defect. That provision addresses when an establishment located “inside another business” can

qualify as an eligible entity in its own right. Auberge’s eligibility does not depend upon treating

its restaurant as a separate eligible entity operating inside an otherwise ineligible hotel. Congress

expressly identified the integrated business category at issue here, an “inn,” as an eligible entity.

SBA therefore cannot avoid Congress’s inclusion of inns by requiring the restaurant component

of an inn to establish independent eligibility under a provision directed to businesses operating

inside other businesses. Doing so converts the statutory question from whether Auberge is an

eligible inn into whether Auberge contains a separately eligible restaurant and thereby materially

narrows the category Congress enacted.

75. Independently, and in the alternative, even assuming SBA possesses some authority to

recover an award subsequently shown to have been unlawfully made, that authority does not permit

SBA to manufacture ineligibility years later by retroactively applying a substantive eligibility

restriction that appears nowhere in the statute or in the eligibility criteria communicated to Auberge

when it applied. The RRF’s express return-of-funds provisions identify circumstances requiring

repayment, including unused funds and cessation of operations during the covered period. 15

U.S.C. § 9009c(c)(6). Auberge used the full award for authorized expenses, remained in operation,

and is not alleged to have committed fraud, made a false statement, diverted proceeds, retained

unused funds, or violated an express award condition. At minimum, any asserted recovery

authority remains bounded by the statute, the APA, contemporaneous program requirements, and

reasoned decision-making, and cannot sustain the challenged claw back on the unpublished

separate-EIN theory alleged here.

Case 1:26-cv-03510 Document 1 Filed 10/07/26 Page 24 of 29

76. Exercising the independent judgment required by the APA and Loper Bright, the Court

should hold that § 9009c neither permits SBA to exclude an otherwise qualifying inn solely

because its integrated operations share an EIN nor authorizes the resulting claw back from Auberge

under the circumstances alleged. The Challenged Agency Actions are therefore contrary to law

and in excess of statutory authority and must be held unlawful and set aside under 5 U.S.C. §

706(2)(A) and (C).

COUNT IV - VIOLATION OF THE APA AND FEDERAL DEBT-COLLECTION LAW:
UNLAWFUL CERTIFICATION AND COLLECTION OF AN ALLEGED FEDERAL
DEBT

77. Auberge incorporates the preceding paragraphs as though fully set forth herein.

78. Administrative offset under 31 U.S.C. § 3716 may proceed only after the agency has a

valid claim and affords the debtor the statutory safeguards, including written notice of the nature

and amount of the claim and the agency’s intention to collect by offset, access to relevant agency

records, an opportunity for agency review of the decision related to the claim, and an opportunity

to enter a written repayment agreement. Those protections require a meaningful opportunity to

contest the legal and factual predicate of the asserted debt; they are not satisfied by a process that

treats the underlying liability as conclusively established while providing no forum authorized to

adjudicate the merits.

79. Federal debt-collection regulations likewise condition referral and offset on a debt being

valid, delinquent or past due, and legally enforceable, as applicable. See, e.g., 31 C.F.R. §§ 285.5,

901.3.

80. The asserted $5,000,000 debt has no source independent of SBA’s recoupment

determination: it is not based on a loan, payment default, settlement, judgment, unused balance, or

admitted overpayment. Its existence, amount, delinquency, and enforceability all depend on the

Case 1:26-cv-03510 Document 1 Filed 10/07/26 Page 25 of 29

proposition that Auberge was ineligible for the RRF award and must return the full grant. Because

that predicate determination is contrary to 15 U.S.C. § 9009c, exceeds SBA’s authority, and was

reached through arbitrary and procedurally defective decision-making, SBA lacks a lawful basis

to certify the derivative amount as a valid, past-due, legally enforceable federal debt.

81. SBA’s sequence foreclosed meaningful merits review of the claim before treating it as

collectible. Auberge timely requested reconsideration of the April 24 recoupment determination

and supplemented that request with evidence and legal argument. While reconsideration remained

pending, SBA issued the June 16 debt notice. SBA then responded on July 9 only that it “cannot

reconsider its decision.” Auberge filed a debt appeal on July 22, but OHA measured the separate

15-day appeal period from receipt of the June 16 notice, concluded that the July 9 response did not

restart that period, and dismissed without deciding eligibility or the lawfulness of the separate-EIN

theory. OHA further observed that it had not resolved whether an RRF reconsideration

determination could be challenged through a debt appeal. Thus, SBA’s reconsideration channel

supplied no reasoned merits determination, and the debt-appeal channel supplied no merits

adjudication. To the extent SBA relies on those procedures as the review required by 31 U.S.C. §

3716(a)(3), they did not provide a meaningful opportunity for agency review of the decision

creating the claim.

82. Because OHA expressly declined to reach the merits, no agency adjudicator has determined,

after considering Auberge’s statutory and factual objections, that the separate-EIN criterion

lawfully rendered Auberge ineligible. SBA cannot satisfy the review contemplated by 31 U.S.C.

§ 3716(a)(3) by commencing the collection process while a timely merits reconsideration remains

pending and then relying on the intervening debt notice to foreclose a later debt appeal before the

reconsideration process has run its course. On the facts alleged, Auberge was left without a

Case 1:26-cv-03510 Document 1 Filed 10/07/26 Page 26 of 29

meaningful agency forum that adjudicated the legal predicate of the asserted debt before collection

consequences attached.

83. SBA may not create a collectible debt merely by labeling an unlawful recoupment demand

a debt. Any certification that the amount is valid, delinquent, past due, or legally enforceable

necessarily carries forward the legal and factual defects in the predicate determination.

Accordingly, any referral to Treasury or another collection component, administrative offset,

interest, penalties, fees, adverse reporting, or other collection activity based on that certification is

arbitrary, capricious, contrary to law, in excess of authority, and undertaken without observance

of required procedure under 5 U.S.C. § 706(2)(A), (C), and (D).

COUNT V - DECLARATORY RELIEF: NO PRESENTLY PAST-DUE, LEGALLY
ENFORCEABLE $5,000,000 DEBT

84. Auberge incorporates the preceding paragraphs as though fully set forth herein.

85. An actual, concrete, and substantial controversy exists between Auberge and Defendants

regarding whether the $5,000,000 RRF award constitutes a presently past-due and legally

enforceable debt of Auberge to the United States. The dispute is neither hypothetical nor

contingent: SBA has issued a repayment demand and debt notice, maintained the demand after

reconsideration, treated the full amount as subject to federal collection, and exposed Auberge to

offset, referral, interest, penalties, fees, reporting consequences, and related business disruption.

86. Auberge contends that no such debt exists because it qualified as an “inn” under the

governing statute and SBA’s announced eligibility standard, exceeded the published 33-percent

threshold, disclosed the integrated structure and common EIN on which SBA now relies, received

SBA approval on those facts, used the full grant for eligible expenses, and satisfied its reporting

obligations. No statute, contemporaneous guidance, award condition, or finding of fraud, misuse,

Case 1:26-cv-03510 Document 1 Filed 10/07/26 Page 27 of 29

unused funds, closure, or false certification supplies an independent repayment obligation. The

asserted debt therefore rises or falls with the unlawful Challenged Agency Actions.

87. Defendants contend, or have acted on the definitive premise, that Auberge must repay

$5,000,000 immediately and that the amount is a valid federal debt subject to collection. The

parties’ positions are therefore squarely adverse on a dispositive legal question with present

consequences: whether SBA may enforce the award as a debt based solely on the separate-EIN

theory stated in the Challenged Agency Actions.

88. A declaration that the Challenged Agency Actions do not establish a presently past-due,

legally enforceable $5,000,000 debt would conclusively resolve the parties’ dispute, eliminate the

asserted legal predicate for collection, and redress Auberge’s ongoing exposure to offset, referral,

accruals, reporting consequences, and business disruption. Declaratory relief is therefore

appropriate under 28 U.S.C. §§ 2201–2202 and the APA.

PRAYER FOR RELIEF

WHEREFORE, Auberge respectfully requests that the Court enter judgment in its favor

and,

A. Declare that the Challenged Agency Actions are arbitrary, capricious, contrary to law,

in excess of statutory authority, without observance of procedure required by law, and otherwise

unlawful under 5 U.S.C. § 706(2);

B. Hold unlawful, vacate and set aside the Challenged Agency Actions and all

certifications, referrals, offsets, reporting, accruals, or collection measures that depend on them;

C. Declare that, absent a new lawful final determination following any remand, the

asserted $5,000,000 obligation is not a presently past-due, legally enforceable debt subject to

federal collection;

Case 1:26-cv-03510 Document 1 Filed 10/07/26 Page 28 of 29

D. Pursuant to 5 U.S.C. § 705 and, in the alternative, Federal Rule of Civil Procedure 65,

postpone the effective date and enforcement of the Challenged Agency Actions and preliminarily

and permanently enjoin Defendants, pending final judicial review and thereafter as necessary to

effectuate the Court’s judgment, from certifying or referring the asserted obligation to Treasury or

any other collection component, administratively offsetting the asserted debt, reporting it as

delinquent, or assessing or collecting interest, penalties, fees, or other collection-related charges

based on the asserted $5,000,000 obligation;

E. In the alternative, remand the matter to SBA with vacatur for a new determination

consistent with 15 U.S.C. § 9009c, the APA, the complete administrative record, and this Court’s

judgment, and prohibit collection unless and until SBA issues a new lawful final determination

after providing Auberge a meaningful opportunity to be heard;

F. Direct SBA to produce and lodge the complete administrative record, including the

materials before SBA when it approved Auberge’s application; all versions of applicant-facing

RRF eligibility guidance in effect during the application period; internal guidance, instructions,

decisional materials, or interpretations concerning the relationship between the statutory “inn”

category, the 33-percent food-and-beverage standard, and the provision addressing a restaurant or

other entity operating independently “inside another business”; Auberge’s reconsideration

submissions; materials considered in the 2026 recoupment determination; and the debt-collection

and OHA records;

G. Award Auberge its costs and reasonable attorneys’ fees to the extent authorized by

law; and

H. Expedite merits briefing and review as necessary to permit prompt resolution of the

record-based APA claims while interim relief remains in effect; and

Case 1:26-cv-03510 Document 1 Filed 10/07/26 Page 29 of 29

I. Grant such other and further relief as the Court deems just and proper.

Dated: October __, 2026 Respectfully submitted,

_______________________________
J. Chris White (D.C. Bar No. 1742758)
CLARK HILL PLC
601 13th Street, N.W., Suite 600
Washington, D.C. 20005
Telephone: (202) 772-0909
jcwhite@clarkhill.com

Counsel for Plaintiff Terre du Soleil, Ltd.
d/b/a Auberge du Soleil

PLEASE SERVE SUMMONSES UPON:

United States Small Business Administration
409 3rd Street SW
Washington, D.C. 20416

United States Small Business Administration
c/o Kelly Loeffler, Administrator
409 3rd Street SW
Washington, D.C. 20416

File and source

File: gov.uscourts.dcd.74934336.1.0.pdf
Size: 188,168 bytes
SHA-256: 765632ed5b653916bea426ebbcef9ca1c02cc7da8347a275223ef5cc13b0659b
Our copy: gov.uscourts.dcd.74934336.1.0.pdf
Original: storage.courtlistener.com