Defendants’ Memorandum in Support of Consented-To Motion for Leave to File a Response to Brief of the American Hotel & Lodging Association as Amicus Curiae — Accordius Health at Asheville, LLC v. United States Small Business Administration (Dkt. 40, W.D.N.C.)

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Defendants' Memorandum in Support of Consented-To Motion for Leave to File a Response to Brief of the American Hotel & Lodging Association as Amicus Curiae in Accordius Health at Asheville, LLC v. United States Small Business Administration, et al., Case No. 1:23-CV-00129-MR, in the U.S. District Court for the Western District of North Carolina, filed April 26, 2024. The defendants seek leave to respond to the proposed amicus brief (Doc. 37-1), which supports the plaintiffs' Administrative Procedure Act challenge concerning the Corporate Group Rule. They state that the amicus brief addresses hotels and borrowers in the hospitality industry, while the plaintiffs are skilled nursing facilities that do not operate in that industry.

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IN THE UNITED STATES DISTRICT COURT
            FOR THE WESTERN DISTRICT OF NORTH CAROLINA
                          ASHEVILLE DIVISION
                       CASE NO. 1:23-CV-00129-MR

ACCORDIUS HEALTH AT                       )
  ASHEVILLE, LLC,                         )
                                          )
      Plaintiff,                          )
                                          )
v.                                        )
                                          )
UNITED STATES SMALL                       )
  BUSINESS ADMINISTRATION,                )
  et al.,                                 )
                                          )
      Defendants.                         )


  DEFENDANTS’ MEMORANDUM IN SUPPORT OF CONSENTED-TO
   MOTION FOR LEAVE TO FILE A RESPONSE TO BRIEF OF THE
 AMERICAN HOTEL & LODGING ASSOCIATION AS AMICUS CURIAE

      NOW COME the Defendants, by and through the undersigned, in support of

Defendants’ motion for leave to file a proposed response to the proposed amicus

brief (Doc. 37-1) lodged by the American Hotel & Lodging Association (“AHLA”)

supporting Plaintiffs in this action under the Administrative Procedure Act

concerning application of the Corporate Group Rule, Defendants state as follows:

      1.      The AHLA brief advances certain contentions regarding the application

of the Corporate Group Rule particular to hotels and borrowers in the hospitality

industry.




       Case 1:23-cv-00129-MR     Document 40     Filed 04/26/24   Page 1 of 3

      2.     If the Court considers the AHLA brief, it would be helpful for the Court

to also consider Defendants’ proposed response.

      3.     As the proposed response explains: Plaintiffs are skilled nursing

facilities. They do not operate in the hospitality industry. Hence, they could not

have based, and did not base, the instant APA challenge on SBA’s application of the

Corporate Group Rule to borrowers in that industry. AHLA’s contentions thus

should not be addressed in this action. In any event, even if the Court were to

entertain them, AHLA’s arguments fail. The Rule is consistent with the text,

structure, and legal context of the CARES Act, and Congress ratified it in subsequent

legislation. Summary judgment should thus be granted to SBA.

      4.     Accordingly, if the Court considers the AHLA brief, it would be helpful

for the Court to also consider the Defendant’ proposed response, which is attached

as Exhibit A.




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       Case 1:23-cv-00129-MR     Document 40      Filed 04/26/24   Page 2 of 3

     Respectfully submitted, this the 26th day of April, 2024.
DENA J. KING                           BRIAN M. BOYNTON
UNITED STATES ATTORNEY                 Principal Deputy Ass’t Attorney General
                                       BRIAN D. NETTER
                                       Deputy Assistant Attorney General
s/Gill P. Beck                         s/James J. Gilligan
GILL P. BECK                           JAMES J. GILLIGAN, T.A. (DC
Assistant United States Attorney       #422152)
Chief, Civil Division                  INDRANEEL SUR (DC #978017)
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: james.gilligan@usdoj.gov
E-Mail: gill.beck@usdoj.gov            Telephone: (202) 514-3358
                                       Fax: (202) 616-8470
                                       Counsel for Defendants




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      Case 1:23-cv-00129-MR     Document 40     Filed 04/26/24   Page 3 of 3

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