Plaintiffs’ Supplemental Brief in Support of Their Motion for Summary Judgment — Accordius Health at Asheville LLC v. United States Small Business Administration (Dkt. 46, W.D.N.C.)

Summary

Plaintiffs' Supplemental Brief in Support of Their Motion for Summary Judgment in Accordius Health at Asheville LLC v. United States Small Business Administration, et al., No. 1:23-cv-00129-MR, in the U.S. District Court for the Western District of North Carolina, filed July 12, 2024. Under the court's July 1, 2024 Order, the plaintiffs address the Supreme Court's ruling in Loper Bright Enterprises v. Raimondo, which they note overruled Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837. They argue that without Chevron deference the defendants cannot prevail, since much of the defendants' summary judgment briefing is framed through that lens. The plaintiffs otherwise stand on their prior arguments.

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

Record facts

Full text

IN THE UNITED STATES DISTRICT COURT
         FOR THE WESTERN DISTRICT OF NORTH CAROLINA
                       ASHEVILLE DIVISION

ACCORDIUS HEALTH AT                        )   No. 1:23-cv-00129-MR
ASHEVILLE LLC,                             )
                                           )   PLAINTIFFS’ SUPPLEMENTAL
          Plaintiff,                       )   BRIEF IN SUPPORT OF THEIR
                                           )   MOTION FOR SUMMARY
          vs.                              )   JUDGMENT
                                           )
UNITED STATES SMALL BUSINESS               )
ADMINISTRATION, et al.,                    )
                                           )
          Defendants.
                                           )

      Pursuant to this Court’s July 1, 2024 Order, Plaintiffs respectfully submit this

supplemental brief addressing the impact of the Supreme Court’s ruling in Loper

Bright Enterprises v. Raimondo, No. 22-451, and Relentless Inc., v. Dept. of

Commerce, No. 22-1219, 2024 WL 3208360 (June 28, 2024) (“Loper”). Loper

created a sea change in litigation under the Administrative Procedure Act (the

“APA”), and its impact on this case in particular cannot be overstated. While

Defendants attempt to downplay Loper’s impact in their Notice of Withdrawal of

Alternative Argument (Doc. 45), they correctly note that Loper overruled Chevron,

U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984), a case (with its

progeny) on which Defendants relied heavily in their briefing in this case.

      Without Chevron, and the agency deference it created, Defendants cannot

prevail. Chevron is the first case they cite in the argument section of their summary




       Case 1:23-cv-00129-MR     Document 46      Filed 07/12/24   Page 1 of 4

judgment motion and, whether they cite directly to Chevron or not, many of the

arguments in Defendants’ summary judgment briefing are framed through the

Chevron deference lens. (Doc. 35, pp. 11-12.)

      In Loper, the Supreme Court evaluated “Chevron deference” that “sometimes

required courts to defer to ‘permissible’ agency interpretations of the statutes those

agencies administer—even when a reviewing court reads the statute differently.”

Loper, 2024 WL 3208360, at *1. The Supreme Court held that “[c]ourts must

exercise their independent judgment in deciding whether an agency has acted within

its statutory authority, as the APA requires.” Id. at *22 (emphasis added). Courts are

not bound by agency interpretation because “interpretation of the meaning of statutes

[is] exclusively a judicial function.” Id. at *1 (quoting United States v. Am. Trucking

Assns., 310 U.S. 534, 140). Following Loper, Defendants’ arguments based on

Chevron and its progeny must be disregarded.

      As a result, all that remains here is Plaintiffs’ arguments that they are entitled

to judgment in their favor because (1) the CARES Act explicitly limited PPP loan

amounts to $10 million to all qualifying entities (not the conflicting lower amount

under the Corporate Group Rule); (2) SBA violated its rulemaking duties in

promulgating IFR #7 by proceeding without a notice and comment period; and, even

if IFR #7 were otherwise valid, (3) SBA incorrectly applied it in this case.




                                           2

       Case 1:23-cv-00129-MR      Document 46      Filed 07/12/24   Page 2 of 4

      When Defendants’ counterarguments are assessed without the benefit of

Chevron deference, the unavoidable outcome is that Plaintiffs’ summary judgment

motion should be granted, and Defendants’ summary judgment motion denied. In

short, Loper allows—indeed requires—this Court to utilize ordinary rules of

statutory construction to assess the parties’ arguments here, without deference to

Defendants’ preferred interpretation. And those rules mandate striking down IFR #7

or, at a minimum, holding that its application to Plaintiffs is impermissible.1

                                    Respectfully submitted,
                                    /s/ Kirk G. Warner
                                    Kirk G. Warner
                                    N.C. State Bar No. 16238
                                    kwarner@smithlaw.com
                                    SMITH, ANDERSON, BLOUNT, DORSETT,
                                    MITCHELL & JERNIGAN, L.L.P.
                                    Post Office Box 2611
                                    Raleigh, North Carolina 27602-2611
                                    (919) 821-1220/Fax: (919) 821-6800
                                    LR 83.1 Counsel
                                    Joshua A. Klarfeld
                                    (admitted pro hac vice)
                                    Ohio State Bar No.(0079833)
                                    jklarfeld@ubglaw.com
                                    UB GREENSFELDER LLP
                                    Cleveland, Ohio 44113-1406
                                    (216) 583-7000/ Fax: (216) 583-7001
                                    Attorneys for Plaintiff


1
  Plaintiffs do not read the Court’s Order requesting supplemental briefing to invite
re-argument of the merits of their prior briefing. Accordingly, they simply stand on
their prior arguments and their rebuttals of Defendants’ summary judgment position
to the extent Defendants’ arguments are not negated in their entirety by Loper.
                                          3

       Case 1:23-cv-00129-MR      Document 46     Filed 07/12/24    Page 3 of 4

                        CERTIFICATE OF SERVICE

      I hereby certify that on this 12th day of July 2024 a true and correct copy of

the foregoing document was electronically filed with the Clerk of Court using the

ECF system. Parties may access this filing through the Court’s system.

                                      /s/ Kirk G. Warner
                                      Attorney for Plaintiff




                                         4

      Case 1:23-cv-00129-MR      Document 46     Filed 07/12/24   Page 4 of 4

File and source

File

gov.uscourts.ncwd.112035.46.0.pdf

Size

199,785 bytes

SHA-256

d11471b0b3df04af505623f277d25fd6c9b1016927a98100a10fd29e86115ce5

Our copy

gov.uscourts.ncwd.112035.46.0.pdf

Original

storage.courtlistener.com