Court filing
Defendants’ Answer — Accordius Health at Asheville LLC v. United States Small Business Administration (Dkt. 17, W.D.N.C.)
Summary
The defendants' answer in Accordius Health at Asheville LLC v. United States Small Business Administration, et al., Case No. 1:23-cv-00129-MR, and related Accordius Health cases in the U.S. District Court for the Western District of North Carolina, Asheville Division, filed October 30, 2023 as Document 17. The SBA and its co-defendants respond paragraph by paragraph to the complaints concerning the Paycheck Protection Program loans at issue, admitting some allegations and referring the court to the cited statutes, including 15 U.S.C. § 636(a)(36) and (37), and to the SBA's forgiveness decisions for their contents. It is signed by counsel for the defendants at the U.S. Department of Justice and runs 27 pages.
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 30, 2023 in Accordius Health at Asheville LLC v. United States Small Business Administration; one of 14 filings from this case.
Record facts
| Court | U.S. District Court for the Western District of North Carolina |
|---|---|
| Filed | 2023-10-30 |
Cite this document
“Defendants’ Answer — Accordius Health at Asheville LLC v. United States Small Business Administration (Dkt. 17, W.D.N.C.).”
U.S. District Court for the Western District of North Carolina, No. 1:23-cv-00129, Doc. 17, filed 2023-10-30. Archived at Pandemic Darlings, https://pandemicdarlings.com/court-filings/full-docket-united-states-small-business-administration-ncwd-112035/2023-10-30-gov-uscourts-ncwd-112035-17-0-doc-17/
, SHA-256 8c56a199e3e6f00409a2f4d758e9e48092a328b229caa1db6e1bc1aa57d286c4.Full text
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
ASHEVILLE DIVISION
)
ACCORDIUS HEALTH AT )
ASHEVILLE LLC, )
)
Plaintiff, )
)
v. ) Case No. 1:23-cv-00129-MR
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
)
ACCORDIUS HEALTH AT )
BREVARD LLC, )
)
Plaintiff, )
)
v. ) Case No. 1:23-cv-00130-MR
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
)
ACCORDIUS HEALTH AT )
CHARLOTTE LLC, )
)
Plaintiff, )
)
v. ) Case No. 3:23-cv-00289-MR
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
Case 1:23-cv-00129-MR Document 17 Filed 10/30/23 Page 1 of 27
)
ACCORDIUS HEALTH AT )
HENDERSONVILLE LLC, )
)
Plaintiff, )
)
v. ) Case No. 1:23-cv-00131-MR
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
)
ACCORDIUS HEALTH AT )
MIDWOOD LLC, )
)
Plaintiff, )
)
v. ) Case No. 3:23-cv-00290-MR
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
)
ACCORDIUS HEALTH AT )
MONROE LLC, )
)
Plaintiff, )
)
v. ) Case No. 3:23-cv-00291-MR
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
2
Case 1:23-cv-00129-MR Document 17 Filed 10/30/23 Page 2 of 27
)
ACCORDIUS HEALTH AT )
MOORESVILLE LLC, )
)
Plaintiff, )
)
v. ) Case No. 5:23-cv-00065-MR
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
)
ACCORDIUS HEALTH AT )
STATESVILLE LLC, )
)
Plaintiff, )
)
v. ) Case No. 5:23-cv-00066-MR
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
)
ACCORDIUS HEALTH AT )
WILKESBORO LLC, )
)
Plaintiff, )
)
v. ) Case No. 5:23-cv-0068-MR
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
3
Case 1:23-cv-00129-MR Document 17 Filed 10/30/23 Page 3 of 27
)
CAROLINA PINES AT )
ASHEVILLE LLC, )
)
Plaintiff, )
)
v. ) Case No. 1:23-cv-00132-MR
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
)
PELICAN HEALTH AT )
RANDOLPH LLC, )
)
Plaintiff, )
)
v. ) Case No. 3:23-cv-00293-MR
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
)
ACCORDIUS HEALTH AT )
BAY POINTE LLC, )
)
Plaintiff, )
)
v. ) Case No. 1:23-cv-00226-MR
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
4
Case 1:23-cv-00129-MR Document 17 Filed 10/30/23 Page 4 of 27
)
ACCORDIUS HEALTH AT )
CONCORD LLC, )
)
Plaintiff, )
)
v. ) Case No. 1:23-cv-00234-MR
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
)
ACCORDIUS HEALTH AT )
GREENSBORO LLC, )
)
Plaintiff, )
)
v. ) Case No. 1:23-cv-00237-MR
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
)
ACCORDIUS HEALTH AT )
LYNCHBURG LLC, )
)
Plaintiff, )
)
v. ) Case No. 1:23-cv-00263-MR
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
5
Case 1:23-cv-00129-MR Document 17 Filed 10/30/23 Page 5 of 27
)
ACCORDIUS HEALTH AT )
RIVER POINTE LLC, )
)
Plaintiff, )
)
v. ) Case No. 1:23-cv-00222-MR
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
)
ACCORDIUS HEALTH AT )
ROSE MANOR LLC, )
)
Plaintiff, )
)
v. ) Case No. 1:23-cv-00236-MR
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
)
ACCORDIUS HEALTH AT )
WILSON LLC, )
)
Plaintiff, )
)
v. ) Case No. 1:23-cv-00244-MR
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
6
Case 1:23-cv-00129-MR Document 17 Filed 10/30/23 Page 6 of 27
)
ACCORDIUS HEALTH AT )
WINSTON SALEM LLC, )
)
Plaintiff, )
)
v. ) Case No. 1:23-cv-00233-MR
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
)
ANDERSON SC OPCO )
LLC, )
)
Plaintiff, )
)
v. ) Case No. 1:23-cv-00230-MR
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
)
CAROLINA PINES AT )
GREENSBORO LLC, )
)
Plaintiff, )
)
v. ) Case No. 1:23-cv-00235-MR
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
7
Case 1:23-cv-00129-MR Document 17 Filed 10/30/23 Page 7 of 27
)
COVINGTON TN OPCO )
LLC, )
)
Plaintiff, )
)
v. ) Case No. 1:23-cv-00228-MR
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
)
FARTHING MAYFIELD KY )
OPCO LLC, )
)
Plaintiff, )
)
v. ) Case No. 1:23-cv-00255-MR
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
)
GREENVILLE KY OPCO )
LLC, )
)
Plaintiff, )
)
v. ) Case No. 1:23-cv-00252-MR
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
8
Case 1:23-cv-00129-MR Document 17 Filed 10/30/23 Page 8 of 27
)
HOPKINSVILLE KY OPCO )
LLC, )
)
Plaintiff, )
)
v. ) Case No. 1:23-cv-00256-MR
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
)
KNOXVILLE OPCO )
LLC, )
)
Plaintiff, )
)
v. ) Case No. 1:23-cv-00241-MR
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
)
LEITCHFIELD KY OPCO )
LLC, )
)
Plaintiff, )
)
v. ) Case No. 1:23-cv-00253-MR
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
9
Case 1:23-cv-00129-MR Document 17 Filed 10/30/23 Page 9 of 27
)
LOUDON OPCO )
LLC, )
)
Plaintiff, )
)
v. ) Case No. 1:23-cv-00240
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
)
MADISONVILLE HEALTH )
AND REHABILITATION LLC, )
)
Plaintiff, )
)
v. ) Case No. 1:23-cv-00254-MR
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
)
MARYVILLE FAIRPARK )
OPCO LLC, )
)
Plaintiff, )
)
v. ) Case No. 1:23-cv-00231-MR
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
10
Case 1:23-cv-00129-MR Document 17 Filed 10/30/23 Page 10 of 27
)
MARYVILLE JAMESTOWN )
OPCO LLC, )
)
Plaintiff, )
)
v. ) Case No. 1:23-cv-00247
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
)
MAYFIELD KY OPCO )
LLC, )
)
Plaintiff, )
)
v. ) Case No. 1:23-cv-00251-MR
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
)
MOUNT PLEASANT TN OPCO )
LLC, )
)
Plaintiff, )
)
v. ) Case No. 1:23-cv-00264-MR
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
11
Case 1:23-cv-00129-MR Document 17 Filed 10/30/23 Page 11 of 27
)
PADUCAH CENTER FOR HEALTH )
AND REHABILITATION LLC, )
)
Plaintiff, )
)
v. ) Case No. 1:23-cv-00257-MR
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
)
PELICAN HEALTH REIDSVILLE )
LLC, )
)
Plaintiff, )
)
v. ) Case No. 1:23-cv-00239-MR
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
)
PELICAN HEALTH )
THOMASVILLE LLC, )
)
Plaintiff, )
)
v. ) Case No. 1:23-cv-00238-MR
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
12
Case 1:23-cv-00129-MR Document 17 Filed 10/30/23 Page 12 of 27
)
PRINCETON KY OPCO )
LLC, )
)
Plaintiff, )
)
v. ) Case No. 1:23-cv-00258-MR
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
)
RED BOILING SPRINGS TN )
OPCO LLC, )
)
Plaintiff, )
)
v. ) Case No. 1:23-cv-00267-MR
)
UNITED STATES SMALL )
BUSINESS ADMINISTRATION, )
et al., )
)
Defendants. )
)
DEFENDANTS’ ANSWER
Defendants United States Small Business Administration (“SBA”), Isabella
Casillas Guzman, in her official capacity as Administrator of the SBA, Janet Yellen,
in her official capacity as Secretary of the Treasury of the United States, and the
United States of America (collectively, “Defendants”), respectfully submit the
following consolidated answer to the individual complaints filed in the above-
captioned actions (collectively, the “Complaints”). The Complaints’ allegations are
identical except for details such as the names and locations of the respective
Plaintiffs, dates pertaining to the Plaintiffs’ applications for and receipt of the
13
Case 1:23-cv-00129-MR Document 17 Filed 10/30/23 Page 13 of 27
Paycheck Protection Program (“PPP”) loans at issue in each case, the loan numbers
and amounts, the names of Plaintiffs’ lenders, dates pertaining to the Plaintiffs’
applications for loan forgiveness, and dates pertaining to the Plaintiffs’ appeals with
SBA’s Office of Hearings and Appeals. Accordingly, the affirmative defenses and
the responses given in the numbered paragraphs below apply equally to each of the
Complaints and their correspondingly numbered paragraphs.
FIRST DEFENSE
The Complaint fails to state claims upon which relief can be granted.
SECOND DEFENSE
The relief Plaintiffs seek is barred by sovereign immunity.
Defendants answer below the numbered paragraphs of the Complaints:
1. Paragraph 1 of the Complaints constitutes Plaintiffs’ characterization
of these actions, to which no response is required.
2-3. Paragraphs 2 and 3 constitute Plaintiffs’ characterization of the
Coronavirus Aid, Relief, and Economic Security Act, Pub. L. No. 116-136, 134 Stat.
281 (2020) (“CARES Act”), to which the Court is respectfully referred for a full and
accurate statement of its contents.
4-5. Paragraphs 4 and 5 constitute Plaintiffs’ characterization of the PPP,
CARES Act § 1102, codified at 15U.S.C. § 636(a)(36) and (37), to which the Court
is respectfully referred for full and accurate statements of their contents.
6. Paragraph 6 constitutes Plaintiffs’ characterization of CARES Act
§ 1106 and SBA, Business Loan Program Temporary Changes; Paycheck Protection
14
Case 1:23-cv-00129-MR Document 17 Filed 10/30/23 Page 14 of 27
Program, Interim Final Rule, 85 Fed. Reg. 20,811(Apr. 15, 2020), to both of which
the Court is respectfully referred for full and accurate statements of their contents.
7. Paragraph 7 constitutes Plaintiffs’ characterizations of the Paycheck
Protection Program and Health Care Enhancement Act, Pub. L. No. 116-139, 134
Stat. 620 (2020); the Paycheck Protection Program Flexibility Act, Pub. L. No. 116–
142, 134 Stat. 641 (2020); Pub. L. No. 116-147, 134 Stat. 660 (2020); and the
Consolidated Appropriations Act, 2021 (“CAA 2021”), Pub. L. No. 116-260, Div.
N, Title III, 134 Stat. 1182, 1993 (2020) (Division N also referred to as the
“Economic Aid Act”), to all of which the Court is respectfully referred for full and
accurate statements of their contents.
8. Paragraph 8 constitutes Plaintiffs’ characterization of the CARES Act,
to which the Court is respectfully referred for a full and accurate statement of its
contents.
9-10. Paragraphs 9-10 constitute Plaintiffs’ characterizations of the four
pieces of legislation referred to in paragraph 7, to all of which the Court is
respectfully referred for full and accurate statements of their contents.
11-13. Paragraphs 11-13 constitute Plaintiffs’ characterization of SBA,
Business Loan Program Temporary Changes; Paycheck Protection Program-
Requirements-Corporate Groups and Non-Bank and Non-Insured Depository
Institution Lenders, Interim Final Rule, 85 Fed. Reg. 26,324 (May 4, 2020) (the
“Corporate Group Rule”), to which the Court is respectfully referred for a full and
accurate statement of its contents.
14. Admit.
15
Case 1:23-cv-00129-MR Document 17 Filed 10/30/23 Page 15 of 27
15. Admit, except to note that the loan issued to plaintiff Accordius Health
at River Pointe was approved on March 24, 2021, not March 23, as alleged.
16. Admit.
17. Paragraph 17 constitutes Plaintiffs’ characterization of SBA’s decisions
denying Plaintiffs’ applications for forgiveness of their PPP loans, to which the
Court is respectfully referred for a full and accurate statement of their contents.
18. Admit.
19. Admit, except to note that the following Plaintiffs filed appeals from
SBA’s loan-forgiveness decisions to SBA’s Office of Hearings and Appeals
(“OHA”) on December 6, 2022, rather than December 7, as alleged: Accordius
Health at Asheville LLC, Accordius Health at Bay Pointe LLC, Accordius Health at
Brevard LLC, Accordius Health at Charlotte LLC, Accordius Health at Concord
LLC, Accordius Health at Greensboro LLC, Accordius Health at Hendersonville
LLC, Accordius Health at Lynchburg LLC, Accordius Health at Midwood LLC,
Accordius Health at Monroe LLC, Accordius Health at Mooresville LLC, Accordius
Health at River Pointe LLC, Accordius Health at Rose Manor LLC, Accordius
Health at Statesville LLC, Accordius Health at Wilkesboro LLC, Accordius Health
at Wilson LLC, and Accordius Health at Winston Salem LLC.
20. Paragraph 20 constitutes Plaintiffs’ characterization of their appeal
petitions seeking OHA review of SBA’s decisions denying their applications for
loan forgiveness. The Court is respectfully referred to Plaintiffs’ petitions for a full
and accurate statement of their contents.
16
Case 1:23-cv-00129-MR Document 17 Filed 10/30/23 Page 16 of 27
21. Admit that the motion to consolidate the OHA appeals of the 38
Plaintiffs in the above-captioned cases was filed on December 22, 2022. The motion
to consolidate the OHA appeals of the other ten companies in Plaintiffs’ corporate
group seeking review of SBA’s loan-forgiveness decisions was filed on December
23, 2022.
22. Admit.
23. Paragraph 23 constitutes Plaintiffs’ characterization of SBA’s response
to Plaintiffs’ appeal petitions, as submitted to the OHA Administrative Law Judge
before whom Plaintiffs’ appeals had been consolidated. SBA’s response is a matter
of record to which the Court is respectfully referred for a full and accurate statement
of its contents.
24-37. Paragraphs 24-37 constitute Plaintiffs’ characterization of the initial
decision by the OHA Administrative Law Judge affirming SBA’s decisions denying
Plaintiffs’ applications for loan forgiveness, which is a matter of record and to which
the Court is respectfully referred for a full and accurate statement of its contents.
38. Paragraph 38 constitutes Plaintiffs’ characterization of their petition for
reconsideration of the initial decision by the OHA Administrative Law Judge, which
is a matter of record and to which the Court is respectfully referred for a full and
accurate statement of its contents.
39. Paragraph 39 constitutes Plaintiffs’ characterization of SBA’s response
their petition for reconsideration of the initial decision by the OHA Administrative
Law Judge. SBA’s response is a matter of record, to which the Court is respectfully
referred for a full and accurate statement of its contents.
17
Case 1:23-cv-00129-MR Document 17 Filed 10/30/23 Page 17 of 27
40-41. Paragraphs 40 and 41 constitute Plaintiffs’ characterization of the
decision by the OHA Administrative Law Judge denying Plaintiff’s petition for
reconsideration and affirming his initial decision. The reconsideration decision by
the OHA Administrative Law Judge is a matter of record, to which the Court is
respectfully referred for a full and accurate statement of its contents.
42. Defendants lack sufficient information and knowledge, and Plaintiffs’
use of the phrase “separate and distinct” is too vague and ambiguous, for Defendants
to form a belief as to the truth or falsity of paragraph 42.
43. Admit that the administrative record of these matters before SBA
contains no information suggesting that Plaintiffs themselves are holding or parent
companies. Otherwise, Defendants lack sufficient information and knowledge to
form a belief as to the truth or falsity of paragraph 43.
44. Paragraph 44 states a conclusion of law to which no response is
required, but to the extent a response is deemed necessary, it is denied.
45. As to paragraph 45, admit that the administrative record of these
matters before SBA reflects that Simcha Hyman and Naftali Zanziper each holds a
50-percent membership interest in each of the 38 Plaintiff companies in the above-
captioned actions, as well as ten other companies to which SBA also denied loan
forgiveness based on the Corporate Group Rule, referenced above. Otherwise,
Defendants lack sufficient information and knowledge to form a belief as to the truth
or falsity of paragraph 45.
46. Paragraph 46 states a conclusion of law to which no response is
required, but to the extent a response is deemed necessary, it is denied.
18
Case 1:23-cv-00129-MR Document 17 Filed 10/30/23 Page 18 of 27
47. As to paragraph 47, admit that the administrative record of these
matters before SBA reflects that Simcha Hyman and Naftali Zanziper each holds a
50-percent membership interest in each of the 38 Plaintiff companies in the above-
captioned actions, as well as ten other companies to which SBA also denied loan
forgiveness based on the Corporate Group Rule, referenced above. Admit also that
the EINs listed for the Plaintiffs and the other ten companies are consistent with
SBA’s records, except to note that the EIN listed for Plaintiff Accordius Health at
Midwood does not match SBA’s records.
48. Paragraph 48 states conclusions of law to which no response is
required, but to the extent a response is deemed necessary, they are denied.
49. Admit that the administrative record of these matters before SBA
contains no information suggesting that Plaintiffs have been owned at any time by a
corporation. Otherwise, Defendants lack sufficient information or knowledge to
form a belief as to the truth or falsity of the allegation that none of the Plaintiffs “was
owned at any time by a corporation.” Paragraph 49 otherwise states a conclusion of
law to which no response is required, but to the extent a response is deemed
necessary, it is denied.
50. Admit that Plaintiffs’ lenders recommended approval of Plaintiffs’
applications for loan forgiveness. Defendants lack sufficient information or
knowledge to form a belief as to the truth or falsity of the allegation that Plaintiffs’
lenders reviewed “information relating to the ‘common parent’ issue[.]”
51. Admit that the information contained in paragraph 47, as to each
individual Plaintiff, should have been contained in the PPP loan application
19
Case 1:23-cv-00129-MR Document 17 Filed 10/30/23 Page 19 of 27
submitted by each Plaintiff to its lender, with the exception of the erroneous EIN for
Plaintiff Accordius Health at Midwood, as noted above.
52. Defendants lack sufficient information and knowledge to form a belief
as to the truth or falsity of the allegation in paragraph 52.
53. Admit that some Plaintiffs filed their OHA appeals from SBA’s loan-
forgiveness decisions on December 7, 2022, but note that the Plaintiffs listed in
paragraph 19, above, filed their appeals on December 6, 2022. However, Defendants
lack sufficient information and knowledge to form a belief as to the truth or falsity
of the allegation in paragraph 53 that Plaintiffs’ appeals were timely, because they
lack sufficient information and knowledge to form a belief as to the truth or falsity
of the allegation in paragraph 52 regarding the date on which Plaintiffs received
copies of SBA’s decisions from their lenders.
54. Admit.
55. Admit.
56. Admit.
57. Deny that Plaintiffs Accordius Health at Wilson; Anderson SC Opco;
Farthing Mayfield KY Opco; Greenville KY Opco, Hopkinsville KY Opco;
Leitchfield KY Opco; Madisonville Health and Rehabilitation; Maryville Fairpark
Opco; Maryville Jamestown Opco; Mayfield KY Opco; Mount Pleasant TN Opco;
Paducah Center for Health and Rehabilitation; Pelican Health Randolph; Pelican
Health Reidsville; Pelican Health Thomasville; and Red Boiling Springs TN Opco,
are currently repaying their PPP loans. Otherwise, admit that the remaining
Plaintiffs in the above-captioned cases are currently repaying their PPP loans.
20
Case 1:23-cv-00129-MR Document 17 Filed 10/30/23 Page 20 of 27
58. Admit that the address given for each Plaintiff in paragraph 58 of the
Complaints is consistent with the address given in each Plaintiff’s PPP loan
application, with the exception of Accordius Health at Asheville; Accordius Health
at Brevard; Accordius Health at Charlotte; Accordius Health at Midwood; Accordius
Health at Monroe; Accordius Health at Greensboro; Anderson SC Opco; Carolina
Pines at Greensboro; Maryville Fairpark Opco; Mount Pleasant TN Opco; and Red
Boiling Springs TN Opco. The address given in the applications submitted by each
of those Plaintiffs is 440 Sylvan Avenue, Suite 240, Englewood Cliffs New Jersey
07632. Defendants otherwise lack sufficient knowledge or information to form a
belief as to the truth or falsity of this paragraph.
59. As to paragraph 59, admit that Defendant SBA is an independent
Federal agency created by section 4(a) of the Small Business Act of 1958, Pub. L.
No. 85-536, 72 Stat. 384 (1958), codified at 15 U.S.C. § 633(a). Admit that the
CARES Act assigns responsibility for administration of the PPP to SBA, although
the Act delegates authority to authorized lenders to make and approve individual
PPP loans, which are then guaranteed by SBA. 15 U.S.C. § 636(a)(36)(F)(ii)(I), (iii).
60. Admit.
61. Paragraph 61 states a conclusion of law to which no response is
required.
62. Admit.
63. Paragraph 63 states a conclusion of law to which no response is
required. To the extent a response is deemed necessary, deny that Secretary Yellen
is a proper Defendant to this case.
21
Case 1:23-cv-00129-MR Document 17 Filed 10/30/23 Page 21 of 27
64. Paragraph 64 states a conclusion of law to which no response is
required.
65. Admit.
66. Paragraph 66 constitutes Plaintiffs’ characterization of these actions, to
which no response is required.
67. Paragraph 67 states a conclusion of law to which no response is
required.
68. Paragraph 68 states a conclusion of law to which no response is
required.
69. The first sentence of paragraph 69 constitutes Plaintiffs’
characterization of the CARES Act, to which the Court is respectfully referred for a
full and accurate statement of its contents. The second sentence states a conclusion
of law to which no response is required, but to the extent a response is deemed
necessary, it is denied.
70-79. Paragraphs 70-79 state conclusions of law to which no response is
required.
80. Defendants incorporate by reference their responses to paragraphs 1-79
of the Complaints, as if fully set forth herein.
81-82. Paragraphs 81-82 state conclusions of law to which no response is
required.
83. Paragraph 83 states conclusions of law to which no response is
required, but to the extent a response is deemed necessary, they are denied.
22
Case 1:23-cv-00129-MR Document 17 Filed 10/30/23 Page 22 of 27
84-85. Paragraphs 84 and 85 constitute Plaintiffs’ characterizations of the
CARES Act, to which the Court is respectfully referred for a complete and accurate
statement of its contents.
86. Paragraph 86 constitutes Plaintiffs’ characterizations of the Corporate
Group Rule, the CARES Act, and the Economic Aid Act, to all of which the Court
is respectfully referred for complete and accurate statements of their contents.
87. Paragraph 87 constitutes Plaintiffs’ characterization of the Corporate
Group Rule, to which the Court is respectfully referred for a complete and accurate
statement of its contents.
88-89. Paragraphs 88 and 89 state conclusions of law to which no response
is required.
90. The allegation that Defendants have violated the Administrative
Procedure Act in implementing the Corporate Group Rule states a conclusion of law
to which no response is required, but to the extent a response is deemed necessary,
it is denied. Otherwise, Defendants lack sufficient information or knowledge to form
a belief as to the truth or falsity of paragraph 90.
91. Paragraph 91 states a conclusion of law to which no response is
required.
92. Defendants incorporate by reference their responses to paragraphs 1-91
of the Complaints, as if fully set forth herein.
93-94. Paragraphs 93 and 94 state conclusions of law to which no response is
required.
23
Case 1:23-cv-00129-MR Document 17 Filed 10/30/23 Page 23 of 27
95. Admit that SBA issued the Corporate Group Rule without following
the APA’s notice-and-comment rulemaking procedures, see 5 U.S.C. § 553(b), in
accordance with the superseding provisions of 15 U.S.C. § 9012.
96. Paragraph 96 states a conclusion of law to which no response is
required, but to the extent a response is deemed necessary, it is denied.
97. Defendants incorporate by reference their responses to paragraphs 1-96
of the Complaints, as if fully set forth herein.
98. Admit that the Corporate Group Rule was the basis on which SBA
relied in denying Plaintiffs’ requests for loan forgiveness, but Defendants observe
further that other grounds may exist on which to deny some or all of Plaintiffs’ loan-
forgiveness applications, either in whole or in part.
99. Paragraph 99 constitutes Plaintiffs’ characterization of the decisions by
the OHA Administrative Law Judge denying Plaintiffs’ appeal petition and their
request for reconsideration. The decisions issued by the OHA Administrative Law
Judge are a matter of record, to which the Court is respectfully referred for a full and
accurate statement of their contents.
100. Paragraph 100 states a conclusion of law, to which no response is
required, but to the extent a response is deemed necessary, it is denied.
101-102. Paragraphs 101 and 102 constitute Plaintiffs’ characterization of the
Corporate Group Rule, to which the Court is respectfully referred for a full and
accurate statement of its contents.
103-104. Paragraphs 103 and 104 state conclusions of law, to which no
response is required.
24
Case 1:23-cv-00129-MR Document 17 Filed 10/30/23 Page 24 of 27
105. Paragraph 105 constitutes Plaintiffs’ characterizations of the Corporate
Group Rule, SBA’s response to Plaintiffs’ appeal petitions, and the decisions issued
by the OHA Administrative Law Judge, to all of which the Court is respectfully
referred for full and accurate statements of their contents.
106-109. Paragraphs 106-109 (including ¶ 108 n.3) state conclusions of law,
to which no response is required.
110. Paragraph 110 states a conclusion of law, to which no response is
required, but to the extent a response is deemed necessary, it is denied.
111-112. Paragraphs 111 and 112 constitute Plaintiffs’ characterization of the
Corporate Group Rule, to which the Court is respectfully referred for a full and
accurate statement of its contents.
113. Paragraph 113 constitutes contra-factual speculation and argument, to
which no response is required.
114. Paragraph 114 constitutes Plaintiffs’ characterization of the Corporate
Group Rule and 13 C.F.R. § 121.103, to both of which the Court is respectfully
referred for full and accurate statements of their contents.
115. Paragraph 115 constitutes Plaintiffs’ characterization of 13 C.F.R.
§ 121.301, to which the Court is respectfully referred for a full and accurate
statement of its contents.
116. Paragraph 116 constitutes Plaintiffs’ characterization of the Corporate
Group Rule—to which the Court is respectfully referred for a full and accurate
statement of its contents—and legal argument to which no response is required.
25
Case 1:23-cv-00129-MR Document 17 Filed 10/30/23 Page 25 of 27
117-119. Paragraphs 117-119 state conclusions of law, to which no response
is required.
120. Paragraph 120 states conclusions of law, to which no response is
required, but to the extent a response is deemed necessary, they are denied.
121. Defendants incorporate by reference their responses to paragraphs 1-
120 of the Complaints, as if fully set forth herein.
122-123. Paragraphs 122 and 123 state conclusions of law, to which no
response is required, but to the extent a response is deemed necessary, they are
denied.
The remainder of the Complaints constitutes a prayer for relief, to which no
response is required. Defendants deny, however, that Plaintiffs are entitled to the
relief prayed for, or to any relief whatsoever.
Defendants specifically deny any and all allegations of the Complaints not
otherwise answered herein.
WHEREFORE, having fully answered, Defendants respectfully request that
Plaintiffs’ claims against them be dismissed, with prejudice, and that the Court
award Defendants such other and further relief as this Court may deem just and
proper.
Respectfully submitted, this the 30th day of October, 2023
26
Case 1:23-cv-00129-MR Document 17 Filed 10/30/23 Page 26 of 27
DENA J. KING BRIAN M. BOYNTON
UNITED STATES ATTORNEY Principal Deputy Ass’t Attorney General
JOHN R. GRIFFITHS
Director
s/Gill P. Beck s/James J. Gilligan
GILL P. BECK JAMES J. GILLIGAN, T.A. (DC
ASSISTANT UNITED STATES #422152)
ATTORNEY INDRANEEL SUR (DC #978017)
CHIEF, CIVIL DIVISION
N.C. Bar No. 13175 ATTORNEYS
Room 233, US Courthouse United States Department of Justice
100 Otis Street Civil Division, Federal Programs Branch
Asheville, NC 28801 P.O. Box 883, Ben Franklin Station
Phone: 828-271-4661 Washington, D.C. 20044
Fax: 828-271-4327
E-Mail: gill.beck@usdoj.gov E-mail: james.gilligan@usdoj.gov
Telephone: (202) 514-3358
Fax: (202) 616-8470
Counsel for Defendants
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