Complaint — Quvaq, LLC v. United States and Small Business Administration (District of Alaska)

Summary

A complaint filed June 9, 2026, by Quvaq, LLC against the United States of America, the Small Business Administration and Kelly Loeffler in the U.S. District Court for the District of Alaska, Case 3:26-cv-00232-SLG. It states that the SBA granted Quvaq a Restaurant Revitalization Fund award of $643,334 for the Bristol Inn and Bayside Diner and then, by a demand letter received on or about April 22, 2026, found the company an ineligible entity and demanded return of the full award. Quvaq argues that it qualified as an "Inn" because 38% of revenue came from the restaurant, and as a concern owned by Choggiung, Ltd., an Alaska Native village corporation. It pleads Count I under the Administrative Procedure Act and Count II for declaratory relief. Counsel is Landye Bennett Blumstein LLP.

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“Complaint — Quvaq, LLC v. United States and Small Business Administration (District of Alaska).” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/1-complaint-against-all-defendants-filing-fee-405-receipt-numb-82ccb5dfa7/, SHA-256 9980eba2956672a8f0c1fa7e1fed5c9792802eca376d09fd96f4c655a3b59901.

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Jennifer M. Coughlin
Landye Bennett Blumstein LLP
701 West 8th Avenue, Suite 1100
Anchorage, Alaska 99501
Phone: (907) 276-5152
Fax: (907) 276-8433
Email: jenniferc@lbblawyers.com
Attorneys for Plaintiff Quvaq, LLC

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ALASKA

QUVAQ, LLC, )
)
Plaintiff, )
)
v. ) Case No.
)
UNITED STATES OF AMERICA, THE ) COMPLAINT
SMALL BUSINESS ADMINISTRATION, )
and KELLY LOEFFLER, in her official )
capacity as administrator of the United )
States Small Business Administration, )
)
Defendants. )

LANDYE BENNETT BLUMSTEIN LLP
)

Plaintiff Quvaq, LLC alleges its complaint against Defendants United States

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of America, The Small Business Administration and Kelly Loeffler, in her official

capacity as administrator of the United States Small Business Administration, as

ANCHORAGE, ALASKA 99501
follows:

INTRODUCTION AND PARTIES

TELEPHONE (907) 276-5152, FAX (907) 276-8433
1. Under Section 5003 of the American Rescue Plan Act (“ARPA”),

enacted in March 2021, Congress created the Restaurant Revitalization Fund

(“RRF”), to be administered by Defendants through the Small Business

COMPLAINT
Quvaq LLC v. U.S.A. et al., Case No. _____________ Page 1 of 9
Case 3:26-cv-00232-SLG Document 1 Filed 06/09/26 Page 1 of 9
Administration (“SBA”). This fund provided relief for certain eligible entities

impacted by the COVID-19 pandemic.

2. Quvaq, LLC (“Quvaq” or “Plaintiff”) is an Alaska limited liability

company, with its principal place of business in Dillingham, Alaska. Quvaq’s sole

member is Choggiung Investment Company LLC, whose sole member is

Choggiung, Ltd. (“Choggiung”), which is a village corporation formed under the

Alaska Native Claims Settlement Act. Choggiung has its principal place of business

in Dillingham, Alaska.

3. Defendant United States of America, Small Business Administration

(“the SBA”) is an agency of the United States Government.

4. Defendant Kelly Loeffler (“Loeffler”) is the Administrator of the

SBA. Under Section 5003 of ARPA, Defendant Loeffler is responsible for

administering the Restaurant Revitalization Fund. She is sued in her official

LANDYE BENNETT BLUMSTEIN LLP
capacity only.

JURISDICTION AND VENUE

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5. This Court has jurisdiction over this complaint under 28 U.S.C.

§1331, 28 U.S.C. §2201, and 5 U.S.C. §702, because this case presents a substantial

ANCHORAGE, ALASKA 99501
question of federal law regarding the interpretation of Section 5003 of ARPA, where

Quvaq is seeking a declaration of its rights and a review of agency action.

TELEPHONE (907) 276-5152, FAX (907) 276-8433
6. This Court also has authority to issue a declaratory judgment and to

order any other relief that is necessary and proper pursuant to 28 U.S.C. §§2201 and

2202.

COMPLAINT
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Case 3:26-cv-00232-SLG Document 1 Filed 06/09/26 Page 2 of 9
7. A substantial part of the events giving rise to this claim occurred in

this district and the Plaintiff resides in this district. Venue is therefore appropriate

in this district under 28 U.S.C. § 1391(e)(1).

STATEMENT OF CLAIM

8. Quvaq owns and operates a business at 104 Main Street in

Dillingham, Alaska under the name “Bristol Inn” which provides 20 rooms for

overnight guests. The Bristol Inn also includes a restaurant on the premises that does

business as the Bayside Diner. Both businesses are wholly owned by Quvaq, and

“Bristol Inn” and “Bayside Diner” are the business names used to identify each of

these business activities.

9. On or about May 6, 2021, Quvaq submitted an application for the

Restaurant Revitalization Funding program, a true and copy of which is attached as

Exhibit A (“the Application”). As set forth on the Application, when asked to check

LANDYE BENNETT BLUMSTEIN LLP
all descriptions of the applicant’s business that applied, Quvaq identified its

business as being both an “inn” and a “restaurant.”

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10. The Application form notes that an “Inn” must have “onsite sales of

food and beverage to the public comprising at least 33% of gross receipts” in order

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to be eligible for the RRF program. In addition, additional documentation for

“applicants that are an Inn” was required to demonstrate that the business met the

TELEPHONE (907) 276-5152, FAX (907) 276-8433
33% requirement. To demonstrate that it met this requirement, Quvaq provided a

letter dated May 3, 2021 along with profit and loss statements showing that the

restaurant portion of the business “has a total revenue of $300,216 and the lodging

COMPLAINT
Quvaq LLC v. U.S.A. et al., Case No. _____________ Page 3 of 9
Case 3:26-cv-00232-SLG Document 1 Filed 06/09/26 Page 3 of 9
income of $479,398,” (i.e. showing that 38% of its total revenue came from the

restaurant). A true and correct copy of the May 3 letter is attached as Exhibit B.

11. The SBA reviewed Quvaq’s application and supporting documents

and granted Quvaq an award of $643,334 from the RRF.

12. On May 2, 2022, Quvaq filed a Post Award Report attesting to how

its award had been spent, a true and correct copy of which is attached as Exhibit C.

13. Almost four years later, on or about April 22, 2026, Quvaq received a

letter from the SBA, a true and correct copy of which is attached as Exhibit D

(“Demand Letter”). As set out in the Demand Letter, the SBA states that it has

determined that Quvaq was an “ineligible entity,” because “Hotels/Motels are not

eligible entities,” and that hotels and motels “are not considered ‘inns’ for the

purpose of the RRF program.” While it did not deny that the Bayside Diner was a

restaurant, it stated that a “restaurant within a hotel/motel must have a separate Tax

LANDYE BENNETT BLUMSTEIN LLP
Identification Number,” and that because both the Bristol Inn and the Bayside Diner

“share the same EIN, the entities cannot be separated for eligibility consideration.”

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The SBA therefore concluded that Quvaq did not qualify for any grant under the

RRF program and demanded that Quvaq return the full amount that had been

ANCHORAGE, ALASKA 99501
awarded (i.e. $643,334).

14. The Demand Letter also sets out escalating interest rates and penalties

TELEPHONE (907) 276-5152, FAX (907) 276-8433
that could be assessed if the $643,334 was not returned.

15. Quvaq responded to the Demand Letter with a letter dated April 30,

2026, a true and correct copy of which is attached as Exhibit E. As set out in that

COMPLAINT
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Case 3:26-cv-00232-SLG Document 1 Filed 06/09/26 Page 4 of 9
letter, Quvaq sought clarification from the SBA as to why the Bristol Inn was being

classified as a “hotel/motel” (an term which is not defined by statute, regulation or

official guidance) rather than an “Inn” (which in addition to its common meaning is

defined in the RRF Program Guide provided by the SBA as a business that

documents on-site sales of food and beverage to the public comprising at least 33%

of gross receipts). A true and correct copy of the RRF Program Guide is attached as

Exhibit F.

16. In addition to seeking information about the SBA’s position, Quvaq’s

April 30, 2026 letter also requested that the SBA reconsider its position that Quvaq

was not an eligible entity under the RRF program.

17. The SBA responded with an email dated May 6, 2026 citing to the

following portion of the RRF Program Guide:

Eligible entities include any of the above entities located in an airport

LANDYE BENNETT BLUMSTEIN LLP
terminal or that operate independently (i.e. has its own tax
identification number) inside another business (e.g. a restaurant that
operates independently inside a hotel or conference center) or that are
a Tribally-owned concern.

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A true and correct copy of the SBA’s email is attached as Exhibit G.

18. By letter dated May 13, 2026 (a true and correct copy of which is

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attached as Exhibit H), Quvaq again asked for the basis for the SBA’s conclusion

that the Bristol Inn was an ineligible “hotel/motel” rather than an eligible Inn. It

TELEPHONE (907) 276-5152, FAX (907) 276-8433
further argued that the RRF Program Guide made it clear that an Inn could be an

eligible entity in its own right if at least 33% of its gross receipts came from the

Inn’s sale of food and beverages, with no requirement that the portion of the Inn’s

COMPLAINT
Quvaq LLC v. U.S.A. et al., Case No. _____________ Page 5 of 9
Case 3:26-cv-00232-SLG Document 1 Filed 06/09/26 Page 5 of 9
business that provided the food and beverages be separately and independently

operated from the rest of the Inn’s business.

19. The May 13, 2026 letter also noted that the RRF Program Guide stated

that eligible entitled include “any of the above entities . . . that are a Tribally owned

concern,” defined as any concern that is “at least 51 percent owned by . . . any

ANC.” As Quvaq was indirectly wholly owned by Choggiung (an ANC), that

ownership provided an additional reason for Quvaq’s eligibility.

20. The SBA responded with an email also dated May 13, repeating that

Quvaq was not an eligible entity because “Hotels and Motels” are not eligible for

RRF grants, that only “eligible businesses” could use the 33% rule, and that “SBA

policy is that the restaurant must have it [sic] own separate EIN.” A true and correct

copy of this email exchange is attached as Exhibit I.

21. A request by Quvaq proposing that the parties discuss the matter was

LANDYE BENNETT BLUMSTEIN LLP
rejected on May 20 with a statement that the SBA’s decision was final. A true and

correct copy of this email exchange, including a May 22, 2026 letter (and a May 26,

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2026 reiteration that the “SBA will not be changing its decision”) is attached as

Exhibit J.

ANCHORAGE, ALASKA 99501
COUNT I – VIOLATION OF THE ADMINISTRATIVE PROCEDURE
ACT
(5 U.S.C. § 706)

TELEPHONE (907) 276-5152, FAX (907) 276-8433
22. Quvaq re-alleges and incorporates by reference all prior paragraphs as

though fully set forth herein.

COMPLAINT
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Case 3:26-cv-00232-SLG Document 1 Filed 06/09/26 Page 6 of 9
23. Defendant SBA accepted Quvaq’s application, granted the funds in

question, accepted Quvaq’s post-award report, and has not disputed its statements

that more than 33% of the revenue received at the Bristol Inn was derived from the

sales of food and beverages. Despite this, Defendant SBA now asserts, without

explanation, that the Bristol Inn is not in fact an “Inn” for purposes of the RRF

program, but is instead a “hotel/motel,” while refusing to provide any definition of

the difference between these two terms (other than the fact that an “Inn” is an

eligible entity, while a “hotel/motel” is not).

24. The SBA’s determination that Quvaq was ineligible for the grant and

its demand for return of grant funds have been described by the SBA as a final

decision and constitute final agency action.

25. For the reasons set forth above and in the correspondence between the

parties, Quvaq was an eligible entity (i.e. an “Inn”) that met all of the known

LANDYE BENNETT BLUMSTEIN LLP
requirements set out in the SBA’s Application, RRF Program Guide, and other

program materials.

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26. The SBA’s determination of ineligibility and its novel claim that a

facility that provides both lodging and food/beverage services, with at least 33% of

ANCHORAGE, ALASKA 99501
its revenue from the food/beverage services (i.e an Inn) must instead consist of two

independent businesses with their own EINs is contrary to the plain language of the

TELEPHONE (907) 276-5152, FAX (907) 276-8433
program guidance, and is not supported by any statute or regulation.

COMPLAINT
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Case 3:26-cv-00232-SLG Document 1 Filed 06/09/26 Page 7 of 9
27. The SBA’s determination that Quvaq was ineligible for the RRF grant

was arbitrary, capricious, an abuse of discretion, and not in accordance with

applicable law.

28. The SBA failed to properly apply the eligibility regulations to

Quvaq’s circumstances or explain its rationale for determining that the Bristol Inn

was not an eligible “Inn” under the RRF program, and its demand for return of all

grant funds is based on its erroneous determination of ineligibility.

29. Quvaq has exhausted its available remedies with the SBA, and the

SBA’s action in demanding the return of all grant funds is final agency action for

which there is no other adequate remedy.

30. Pursuant to 5 U.S.C. §706, the SBA’s agency action should be held

unlawful and set aside.

COUNT II – DECLARATORY RELIEF

LANDYE BENNETT BLUMSTEIN LLP
31. Quvaq re-alleges and incorporates by reference all prior paragraphs as

though fully set forth herein.

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32. The SBA has sent a Demand Letter demanding the return of all of the

grant funds Quvaq received, with significant and escalating consequences if the

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demand is not met.

33. There exists an actual controversy between the parties regarding

TELEPHONE (907) 276-5152, FAX (907) 276-8433
Quvaq’s eligibility for the RRF grant it was awarded.

34. The controversy is of sufficient immediacy to warrant declaratory

relief, and a judicial declaration will resolve the dispute over Quvaq’s eligibility.

COMPLAINT
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Case 3:26-cv-00232-SLG Document 1 Filed 06/09/26 Page 9 of 9

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