Opening Brief of Defendant-Appellant — 112 GENESEE STREET, LLC v. United States, No. 25-1373 (Fed. Cir.)
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The opening brief of Defendant-Appellant, dated March 14, 2025, in the Federal Circuit, No. 25-1373, Plaintiffs-Appellees, v. The United States, on appeal from the Court of Federal Claims, No. 23-1876C, Judge Hertling. The Department of Justice argues that 15 U.S.C. § 9009c, the Restaurant Revitalization Fund (RRF) statute, is not money-mandating and that the trial court exceeded its Tucker Act jurisdiction. In the alternative, it argues that the plaintiffs fail to state a claim because of a statutory cap of $28.6 billion on the Government's liability. The brief notes that the court granted the petition for interlocutory appeal on January 17, 2025, and it appends the July 24, 2024 opinion and order denying the motion to dismiss.
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“Opening Brief of Defendant-Appellant — 112 GENESEE STREET, LLC v. United States, No. 25-1373 (Fed. Cir.).”
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IN THE UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT
112 GENESEE STREET, LLC, et. al., )
)
Plaintiffs-Appellees, )
)
v. )
No. 25-1373
)
THE UNITED STATES, )
)
Defendant-Appellant. )
APPEAL FROM THE UNITED STATES COURT OF FEDERAL CLAIMS,
in No. 23-1876C, Judge Hertling
__________________________________________________________________
OPENING BRIEF OF DEFENDANT-APPELLANT
YAAKOV M. ROTH
Acting Assistant Attorney General
PATRICIA M. McCARTHY
Director
WILLIAM J. GRIMALDI
Assistant Director
REBECCA S. KRUSER
Senior Trial Attorney
Commercial Litigation Branch
Department of Justice
Civil Division
P.O. Box 480, Ben Franklin Station
Washington, D.C. 20044
Tel: (202) 305-2035
Email: rebecca.s.kruser@usdoj.gov
March 14, 2025 Attorneys for Defendant-Appellant
TABLE OF CONTENTS
Page
STATEMENT OF RELATED CASES ........................................................................... viii
INTRODUCTION ..................................................................................................................1
STATEMENT OF JURISDICTION ...................................................................................1
STATEMENT OF THE ISSUES..........................................................................................2
STATEMENT OF THE CASE .............................................................................................2
I. Statutory Background....................................................................................................2
II. History of the Restaurant Revitalization Fund .........................................................5
III. Prior Unsuccessful Litigation .......................................................................................6
IV. Proceedings in the Trial Court.....................................................................................9
SUMMARY OF THE ARGUMENT ................................................................................ 11
ARGUMENT ......................................................................................................................... 12
I. Standard Of Review ................................................................................................... 12
II. The Trial Court Erred Because Section 9009c is Not
Money-Mandating....................................................................................................... 12
A. Tucker Act Claims and the Money-Mandating Requirement .................. 12
B. Section 9009c is Not Money-Mandating Under Maine
Community Health and Other Precedent ....................................................... 13
C. The Trial Court Erred In Reading Implied Money-Mandating
Obligations Into Non-Monetary Administrative
Requirements ................................................................................................... 21
D. The Trial Court Erred In Relying On Cases That Discuss When
a Discretionary Statute is Money-Mandating.............................................. 26
i
III. The Trial Court’s Decision is Contrary to the Court’s Precedent Regarding
Grant Programs .......................................................................................................... 30
IV. The Trial Court Misunderstood the Scope of Tucker Act Jurisdiction ............. 34
A. The Trial Court Erred By Preemptively Determining that Plaintiffs-
Appellees’ Claims Come Under Tucker Act Jurisdiction ......................... 35
B. The Trial Court Erred By Failing to Properly Apply Bowen ..................... 38
C. The Trial Court Failed to Properly Apply Katz ......................................... 44
D. The Trial Court Erroneously Opined That It Shares Jurisdiction With
the District Courts Over This Case ............................................................. 45
E. The Trial Court Erroneously Found the Potential Unavailability
of Relief in Another Forum to be Relevant to its Jurisdiction.................. 47
V. In the Alternative, the Trial Court Erred In Holding that Plaintiffs-Appellees
State a Claim Upon Which Relief Can Be Granted .............................................. 48
A. 15 U.S.C. § 9009c(b)(2)(A) Imposes A Statutory Cap On the Amount
That Congress Intended To Spend For the RRF Program ...................... 48
B. The Trial Court Misinterpreted Section 9009c(b)(2)(A) to Be
Open-Ended and Uncapped ......................................................................... 50
C. The Trial Court Ignored That Congress’ Subsequent Actions
Eliminated Any Payment Obligation ........................................................... 51
D. The Trial Court Erred by Determining That Even if the Government’s
Liability Was Capped, Plaintiffs-Appellees Would Still State a Claim .... 53
CONCLUSION ..................................................................................................................... 54
CERTIFICATE OF COMPLIANCE ................................................................................ 55
ADDENDUM
ii
TABLE OF AUTHORITIES
CASES PAGE(S)
Adia Holdings, Inc. v. United States,
170 Fed. Cl. 296 (2024) .........................................................................................................8
Bowen v. Mass.,
487 U.S. 879 (1988) ..................................................................................................... passim
Broughton Lumber Co.
939 F.2d 1547 (Fed. Cir. 1991) ..........................................................................................46
Chef Time 1520, LLC v. SBA,
646 F. Supp. 3d 101 (D.D.C. 2022) ....................................................................................8
Consol. Edison Co. of New York v. Dep’t of Energy,
247 F.3d 1378 (Fed. Cir. 2001) .............................................................................39, 41, 42
Dancy v. United States,
229 Ct. Cl. 300 (1982)..........................................................................................................37
Doe v. United States,
463 F.3d 1314 (Fed. Cir. 2006) ................................................................................... 27, 28
Dorsey v. United States,
567 U.S. 260 (2012) .............................................................................................................52
Eastport S. S. Corp. v. United States,
372 F.2d 1002 (Ct. Cl. 1967) .................................................................................22, 23, 24
Fisher v. United States,
402 F.3d 1167 (Fed. Cir. 2005) ..........................................................................................53
Greenlee County, Ariz., v. United States,
487 F.3d 871 (Fed. Cir. 2007) ...............................................................................17, 18, 49
Greer’s Ranch Café v. Guzman,
540 F. Supp. 3d 638 (N.D. Tex. 2021) ...............................................................................3
iii
Hopi Tribe v. United States,
782 F.3d 662 (Fed Cir. 2015) .............................................................................................12
Ind. Mun. Power Agency v. United States,
154 Fed. Cl. 752 (2021) .......................................................................................................52
Infidels, LLC v. Guzman,
No. 3:22-391, 2023 WL 5599605 (M.D. Tenn. Aug. 29, 2023) ...................................... 7
Kanemoto v. Reno,
41 F.3d 641 (Fed. Cir. 1994)...............................................................................................18
Katz v. Cisneros,
16 F.3d 1204 (Fed. Cir. 1994) .................................................................................... passim
Kingsley Restaurants, Inc.,
2021 WL 8441778 ..................................................................................................................7
Litecubes, LLC v. Northern Light Products, Inc.,
523 F.3d 1353 (Fed. Cir. 2008) ..........................................................................................12
Little River Lumber Co. v. United States,
7 Cl. Ct. 492 (1985) ..............................................................................................................37
Livingston v. Derwinski,
959 F.2d 224 (Fed. Cir. 1992) ............................................................................................45
Lummi Tribe of the Lummi Rsrv. v. United States,
99 Fed. Cl. 584 (2011) .........................................................................................................30
Lummi Tribe of the Lummi Rsrv. v. United States,
870 F.3d 1313 (Fed. Cir. 2017) .................................................................................. passim
Malone v. United States,
849 F.2d 1441 (Fed. Cir. 1988) ..........................................................................................22
Martinez v. United States,
333 F.3d 1295 (Fed. Cir. 2003) ................................................................................... 34, 46
iv
MC Mgmt. of Rochester LLC v. Biden,
No. 6:22-6337, 2023 WL 4194771 (W.D.N.Y. June 27, 2023) ....................................... 7
Me. Cmty. Health Options v. United States,
590 U.S. 296 (2020) ..................................................................................................... passim
Nat’l Air Traffic Controllers Ass’n v. United States,
160 F.3d 714 (Fed. Cir. 1998) ..................................................................................... 13, 26
Nat’l Ctr. for Mfg. Scis. v. United States,
114 F.3d 196 (1997) .............................................................................................................32
Perri v. United States,
340 F.3d 1337 (Fed. Cir. 2003) ................................................................................... 27, 28
Portland Mint v. United States,
102 F.4th 1371 (Fed. Cir. 2024) .........................................................................................46
Prairie County, Mont. v. United States,
782 F.3d 685 (Fed. Cir. 2015) ...............................................................................17, 18, 50
Reboot Macon, LLC v. United States,
No. 5:21-CV-221, 2023 WL 4672395 (M.D. Ga. July 20, 2023) .................................... 7
Samish Indian Nation v. United States,
419 F.3d 1355 (Fed. Cir. 2005) .................................................................................. passim
Star-Glo Assocs., LP v. United States,
414 F.3d 1349 (Fed. Cir. 2005) ..........................................................................................51
Suburban Mortgage Associates, Inc. v. United States,
480 F.3d 1116 (Fed. Cir. 2007) .................................................................................. passim
United States v. Bormes,
568 U.S. 6 (2012) ..................................................................................................................26
United States v. Fisher,
109 U.S. 143 (1883) .............................................................................................................52
United States v. King,
395 U.S. 1 (1969) ........................................................................................................... 13, 26
v
United States v. Mitchell,
109 U.S. 146 (1883) .............................................................................................................53
United States v. Mitchell,
463 U.S. 206 (1983) .............................................................................................................13
United States v. Testan,
424 U.S. 392 (1976) ..................................................................................................... passim
United States v. White Mountain Apache Tribe,
537 U.S. 465 (2003) .............................................................................................................13
Vitolo v. Guzman,
999 F.3d 353 (6th Cir. 2021) ..................................................................................... 3, 7, 54
W6 Rest. Grp., Ltd. v. Guzman,
732 F. Supp. 3d 739 (N.D. Ohio 2024) ..................................................................... 5, 6, 8
STATUTES
5 U.S.C. § 706(2)(A) ..............................................................................................................33
5 U.S.C. § 706(2)(C) ..............................................................................................................33
5 U.S.C. § 706(2)(D) .............................................................................................................33
5 U.S.C. § 5545(c)(2) .............................................................................................................26
15 U.S.C. § 9009c ........................................................................................................... 1, 6, 53
15 U.S.C. § 9009c(a)(3) ...................................................................................................... 3, 31
15 U.S.C. § 9009c(a)(4) .............................................................................................................2
15 U.S.C. § 9009c(a)(7) ........................................................................................................ 3, 4
15 U.S.C. § 9009c(b)(2)(A) .......................................................................................... 4, 47, 50
15 U.S.C. § 9009c(b)(3) ...................................................................................................... 4, 13
15 U.S.C. § 9009c(c)(1) ................................................................................................... passim
vi
15 U.S.C. § 9009c(c)(3)(A) .......................................................................................................2
15 U.S.C. § 9009c(c)(4)(A) .......................................................................................................3
15 U.S.C. § 9009c(c)(5) ...................................................................................................... 3, 31
15 U.S.C. § 9009c(c)(6) ................................................................................................... passim
28 U.S.C. § 524.........................................................................................................................27
28 U.S.C. § 1292(d) ...................................................................................................................1
28 U.S.C. § 1292(d)(4)(A) .......................................................................................................39
28 U.S.C. § 1491 ......................................................................................................................22
28 U.S.C. § 1491(a)(1) .............................................................................................................12
28 U.S.C. § 1631 ......................................................................................................................36
42 U.S.C. § 18062(a) ................................................................................................................14
42 U.S.C. § 18062(b)(1) ..........................................................................................................14
Pub. L. No. 117-2, 135 Stat. 4 (2021) .....................................................................................2
Pub. L. No. 118-5 ............................................................................................................... 5, 51
RULES
Federal Rules of Appellate Procedure 27(d)(1)(E) .............................................................55
vii
STATEMENT OF RELATED CASES
No other appeal in or from the present civil action has previously been before
this or any other appellate court. The Government is not aware of any related cases
within the meaning of Federal Circuit Rule 47.5(b).
viii
IN THE UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT
112 GENESEE STREET, LLC, et al., )
)
Plaintiffs-Appellees, )
)
v. ) 25-1373
)
UNITED STATES, )
)
Defendant-Appellant. )
BRIEF OF DEFENDANT-APPELLANT
INTRODUCTION
This case presents an opportunity for the Court to reaffirm the fundamental
boundaries of the Court of Federal Claims’ (trial court) jurisdiction against plaintiffs
seeking its expansion. The trial court is not a forum to provide redress to plaintiffs
who claim harm stemming from allegedly erroneous Government actions in the
absence of one of the bases for jurisdiction listed in the Tucker Act. Nor is the trial
court the proper venue to review agency decisions in the administration of Federal
programs. The trial court’s decision ventures far beyond the governing precedent and
conflicts with the well-established understanding of its history, role, and unique
jurisdiction.
STATEMENT OF JURISDICTION
This Court has jurisdiction pursuant to 28 U.S.C. § 1292(d). On July 24, 2024,
the trial court issued the interlocutory order that is subject to appeal. Appx1-34. The
trial court certified that order for appeal on October 24, 2024. Appx35-42. On
January 17, 2025, this Court granted our petition for interlocutory appeal of the order
in question.
STATEMENT OF THE ISSUES
1. The trial court erred in holding that the statute establishing the
Restaurant Revitalization Fund (RRF), 15 U.S.C. § 9009c, which states that the Small
Business Administration (SBA) “shall award grants to eligible entities in the order in
which applications are received,” is a money-mandating statute authorizing damages
for SBA’s use of a different method of disbursement.
2. If the statute is money-mandating, the trial court erred in holding that
plaintiffs-appellees state a claim upon which relief can be granted in light of a plain
language statutory cap on the Government’s liability in the specific amount of $28.6
billion.
STATEMENT OF THE CASE
I. Statutory Background
On March 11, 2021, Congress created the RRF and put it within SBA’s
administration. See Pub. L. No. 117-2, 135 Stat. 4 (2021). The purpose of the RRF
was to provide assistance to restaurants struggling during the COVID-19 pandemic by
giving out grants to “eligible entities” in an amount equal to their “pandemic-related
2
revenue loss[.]”1 15 U.S.C. §§ 9009c(a)(4), (7). Eligible entities were defined to
include restaurants and other similar businesses, but excluded State or local
government-operated businesses, entities with more than 20 locations, entities that
had applied for or received another type of SBA grant, or publicly-traded companies.
See id. at § 9009c(a)(4). For eligible entities that were open and operating for the
entirety of 2019, the pandemic-related revenue loss was defined simply as the entity’s
2020 gross receipts subtracted from its 2019 gross receipts. See id. at § 9009c(a)(7).
Eligible entities could receive grants equal to their pandemic-related revenue loss up
to an aggregate maximum of $10 million, with no more than $5 million per physical
location. Id. at § 9009c(c)(4)(A).
Eligible entities were only permitted to use the grant funds on eleven categories
of expenses incurred as a “direct result of, or during, the COVID-19 pandemic[.]” Id.
at § 9009c(c)(5). This list included payroll costs, mortgage payments (except for
prepayment of the principal), rent payments (except for the prepayment of rent),
1
The RRF program contained a requirement that SBA “prioritize awarding grants
to eligible entities” that were either “small business concerns owned and controlled by
women,” “small business concerns owned and controlled by veterans,” or “socially
and economically disadvantaged small business concerns” for the first twenty-one
days. 15 U.S.C. § 9009c(c)(3)(A). A divided motions panel of the U.S. Court of
Appeals for the Sixth Circuit concluded that this priority program likely violated the
Fifth Amendment’s equal-protection guarantee. See Vitolo v. Guzman, 999 F.3d 353
(6th Cir. 2021). A district judge in the Northern District of Texas reached the same
conclusion in two other cases. See Greer’s Ranch Café v. Guzman, 540 F. Supp. 3d 638
(N.D. Tex. 2021); Order, Blessed Cajuns LLC v. Guzman, No. 4:21-677 (N.D. Tex. May
28, 2021) (ECF No. 18).
3
utilities, maintenance expenses (including construction to accommodate outdoor
seating), supplies (including protective equipment and cleaning materials), food and
beverage expenses “within the scope of the normal business practice” for the eligible
entity pre-COVID, and paid sick leave. Id.
The statute also included a “covered period” beginning on February 15, 2020,
and ending “on December 31, 2021, or a date to be determined by the Administrator
that is not later than 2 years after March 11, 2021.” Id. at § 9009c(a)(3). The SBA
Administrator exercised this authority and the “covered period” thus ended on March
11, 2023. Crucially, the statute also contained a provision regarding the return of
funds, which was tied to the “covered period.” If an eligible entity failed “to use all
grant funds” or “permanently cease[d] operations on or before the last day of the
covered period,” the eligible entity “shall return to the Treasury any funds that the
eligible entity did not use . . . .” See id. at § 9009c(c)(6). Additionally, the statute
required that awardees return to the Treasury any amount of a grant “based on
estimated receipts that is greater than the actual gross receipts of the eligible entity in
2020[.]” Id. at § 9009c(c)(4)(B)(ii).
To implement this program, Congress appropriated money. The statute stated
that “[i]n addition to amounts otherwise available, there is appropriated to the [RRF]
for fiscal year 2021, out of any money in the Treasury not otherwise appropriated,
$28,600,000,000, to remain available until expended.” Id. at § 9009c(b)(2)(A). In
4
terms of distributing this money, the statute stated that the SBA Administrator “shall
use amounts in the Fund to make grants described in subsection (c).” Id. at
§ 9009c(b)(3). This subsection (c) contained the statement that “the Administrator
shall award grants to eligible entities in the order in which applications are received by
the Administrator.” Id. at § 9009c(c)(1).
II. History of the Restaurant Revitalization Fund
SBA began accepting applications for RRF grants on May 3, 2021. Appx5. By
May 18, 2021, SBA had received 303,000 applications requesting approximately $69
billion in grants, which far exceeded the $28.6 billion Congress appropriated for the
RRF program. See W6 Rest. Grp., Ltd. v. Guzman, 732 F. Supp. 3d 739, 742 (N.D.
Ohio 2024).2 Due to this overwhelming demand, SBA stopped accepting applications
on May 24, 2021. Id. SBA processed and made awards through June 30, 2021,
ultimately funding approximately 101,000 RRF grants.
During this period, SBA processed applications based on the date and time an
application was electronically signed and submitted. However, not all applications
took the same time to process. Because 15 U.S.C. § 9009c(c)(1) limited SBA to
awarding to “eligible entities,” SBA had to confirm an applicant’s eligibility before
issuing an award. In the face of a deluge of applications, some applications took
W6 Restaurant Group is currently on appeal before the United States Court of
2
Appeals for the Sixth Circuit. No. 24-3483 (6th Cir.)
5
longer to process because they were more complex or had errors or omissions that
SBA allowed applicants to correct.
On July 2, 2021, SBA announced that the RRF fund was exhausted. See W6
Rest. Grp., Ltd., 732 F. Supp. 3d at 742. Then, separately, in November 2022, still
within the “covered period,” SBA announced that it would reallocate approximately
$83.4 million in recovered funds. Id. SBA made awards to another 169 applicants
with this money. Id. In February 2023, the SBA announced again that all grants from
the RRF had been distributed and that no money remained. Id.
On March 11, 2023, the “covered period” expired. Congress then expressly
defunded the RRF on June 3, 2023, when the Fiscal Responsibility Act became law.
See Pub. L. No. 118-5, 137 Stat. 10. As part of a bipartisan agreement to suspend the
public debt limit through January 1, 2025, the law rescinded unobligated funds from
at least eighty-one different Federal programs, including the RRF. See id. § 52, 137
Stat. at 28 (“The unobligated balances of amounts made available by section
5003(b)(2)(A) of Public Law 117-2 are hereby permanently rescinded.”).3
III. Prior Unsuccessful Litigation
This case is part of a series of disputes about the administration of the RRF
program and should be understood in light of several earlier unsuccessful cases in
3
Congress created the RRF as section 5003 part of the American Rescue Plan Act
of 2020. Section 5003 was later codified at 15 U.S.C. § 9009c.
6
district court and the Court of Federal Claims, which were all filed after the $28.6
billion had been exhausted. In Kingsley Restaurants, Inc., MC Management of Rochester,
LLC, and Infidels, LLC, the plaintiffs challenged the constitutionality of the 21-day
priority period and sought injunctive relief. However, unlike the Vitolo plaintiffs, they
were too late to obtain any relief. Three different district courts dismissed on
standing or mootness grounds because the priority period had ended and all of the
money had been disbursed. See Kingsley Restaurants, Inc. v. U.S. Small Bus. Admin., No.
1:21-2314, 2021 WL 8441778, at *1-*3 (N.D. Ga. Aug. 24, 2021) (unreported); MC
Mgmt. of Rochester LLC v. Biden, No. 6:22-6337, 2023 WL 4194771, at *1-*3 (W.D.N.Y.
June 27, 2023); Infidels, LLC v. Guzman, No. 3:22-391, 2023 WL 5599605, at *2-*3
(M.D. Tenn. Aug. 29, 2023).
Next, in Reboot Macon, LLC, the plaintiffs were priority applicants who did not
receive RRF grants because SBA decided not to fund priority applications after the
Vitolo decision. Reboot Macon, LLC v. United States, No. 5:21-CV-221, 2023 WL
4672395, at *1 (M.D. Ga. July 20, 2023). The plaintiffs challenged SBA’s actions
under the Administrative Procedure Act (APA), alleging that SBA funded non-priority
applications that were submitted after plaintiffs’ applications. Id. The district court
held that the depletion of the RRF and the end of the “covered period” mooted the
plaintiffs’ claims. Id. at *4-*7.
The district court decision in W6 Restaurant Group is most relevant to the
7
instant case. The plaintiffs asserted an APA claim that SBA failed to comply with 15
U.S.C. § 9009c(c)(1) because SBA did not process applications for RRF grants in the
order in which they were received. W6 Rest. Grp., 732 F. Supp. 3d at 743. The
plaintiffs sought an injunction to require SBA to process all applications in the order
in which they were received and to obtain the return of grant funds provided to
ineligible entities for redistribution. Id. The district court held that the APA did not
grant jurisdiction to review an agency’s non-enforcement decisions. Id. at 746-48.
The district court also held that the plaintiffs’ broader request for review of SBA’s
compliance with section 9009c(c)(1) was moot because of the end of the “covered
period” and the Fiscal Responsibility Act’s rescinding of any unobligated RRF funds.4
Id. at 748-53.
Finally, a different group of plaintiffs brought suit regarding the RRF program
in the Court of Federal Claims in May 2023 in Adia Holdings, Inc. These plaintiffs
asserted that the trial court possessed jurisdiction because the RRF statute created a
4
Relatedly, Chef Time 1520, LLC v. SBA is also a useful demonstration of what
plaintiffs-appellees here could have done. In that case, the plaintiffs brought an APA
claim challenging SBA’s failure to maintain their place in the queue after they
addressed discrepancies in their applications. 646 F. Supp. 3d 101, 109 (D.D.C. 2022).
When the plaintiffs filed suit, SBA had not yet distributed all of the $83 million that it
had available in November 2022 and thus there was no redressability problem. Id. at
107-08. The district court analyzed the statutory language that SBA must “award
grants to eligible entities in the order in which the applications are received” and held
that it was not arbitrary and capricious for SBA to use the time an application was
substantially correct and complete, not when it was first submitted. Id. at 111.
8
contract with applicants. The trial court dismissed this case for failure to state a claim.
170 Fed. Cl. 296-97 (2024).
IV. Proceedings in the Trial Court
On October 25, 2023, plaintiffs-appellees, 303 businesses in the restaurant
industry, brought suit at the trial court over SBA’s purported failures in administering
the RRF program. See Appx49-50. In order to ostensibly come within the trial
court’s Tucker Act jurisdiction, plaintiffs-appellees allege that the RRF statute is
money-mandating. However, plaintiffs-appellees did not simply claim that they
submitted eligible applications that the statute required SBA to pay.
Instead, plaintiffs-appellees allege that SBA’s actions were unlawful, arbitrary,
capricious, and negligent. Appx50-87. Plaintiffs-appellees focus on the idea that SBA
failed to follow a statutory mandate to award grants in the order that applications
were received.5 Appx82-88. Plaintiffs-appellees theorize that as first-day applicants,
5
Although plaintiffs-appellees have made the order in which grants were awarded
their central theory, their complaint details a large number of other alleged
administrative failures on the part of SBA. Plaintiffs-appellees claim that the SBA did
not have sufficient pre-award controls to stop fraud or verify applicants’ gross
receipts, Appx73-75, did not properly review applications and resolve issues, Appx76,
did not manage the online portal properly, Appx76-77, failed to take reasonable
measures to detect fraud, Appx77-78, unlawfully applied program procedures,
Appx78-79, did not perform an assessment of the effectiveness of its pre-award
controls, Appx79-80, failed to enforce reporting requirements, Appx80, failed to act
to recover fraudulent, misused, or unused funds, Appx81, incorrectly implemented
payment processing, Appx81, and did not perform an estimate of misallocated funds,
Appx81-82. Plaintiffs-appellees also alleged instances in which the SBA applied its
9
they would have received grants but for SBA’s unlawful, negligent, and arbitrary and
capricious use of processing order, not time of application, to make awards. Appx88.
According to plaintiffs-appellees, the use of an incorrect method of making awards
“resulted in the misallocation of billions of dollars of RRF funds to award grants to
applicants who were or should have been in line behind [plaintiffs-appellees].”
Appx58-59, Appx87-88. Plaintiffs-appellees thus claim that the requirement to award
grants in the order in which applications were received is money-mandating and that
they have an entitlement to money damages because SBA prevented them from
receiving grants by arbitrarily and capriciously exhausting the appropriated funding on
grants to later applicants. Appx83-88.
On February 26, 2024, we moved to dismiss for lack of subject-matter
jurisdiction, primarily because the RRF statute is not money-mandating. After oral
argument, the trial court requested supplemental briefing as to whether plaintiffs-
appellees failed to state a claim. On July 24, 2024, the trial court issued an opinion
and accompanying order denying our motion. Appx1-34.
Despite the novel and indirect nature of this claim, the trial court determined
that it possesses subject-matter jurisdiction. The trial court also held that plaintiffs-
rules too strictly and excluded plaintiffs’ applications from consideration. Appx68-72.
Plaintiffs-appellees assert that these issues caused SBA to “misallocate” program
funds towards undeserving or fraudulent parties, instead of awarding them grants.
Appx82, Appx83.
10
appellees state a claim for which relief can be granted. We bring this interlocutory
appeal to challenge both of these holdings.
SUMMARY OF THE ARGUMENT
Although on the surface, the trial court’s lengthy and detailed opinion may
seem like a grand edifice, it is built on a faulty foundation. The most basic problem is
that section 9009c is not money-mandating. The trial court erred by taking statutory
language out of context and reading it in isolation. Importantly, section 9009c’s
wording is dissimilar to statutes that have been found to genuinely create a payment
obligation on the part of the Government either through mandatory or even
discretionary language. The trial court would read into non-pecuniary statutes an
implied right of compensation for wrongful Government decisions or actions, a
theory that has been soundly rejected by this Court. Even further, the trial court’s
decision conflicts with the Court’s recent decision finding no jurisdiction over a
statute addressing a similar strings-attached grant program.
Furthermore, the trial court incorrectly relied upon plaintiffs-appellees’ own
characterization of their claims to find that it possesses jurisdiction. The trial court
brushed aside key cases explaining the boundary of Tucker Act jurisdiction and
demonstrating why plaintiffs-appellees’ claims should have been brought elsewhere.
The trial court’s expansive view of its jurisdiction as concurrent with or dependent
upon the existence of district court jurisdiction is unfounded and unsupported.
11
Alternatively, even if section 9009c is money-mandating, the trial court erred in
determining that plaintiffs-appellees state a claim upon which relief can be granted.
The statute contains a clear cap on the Government’s obligation. The trial court also
ignored that Congress’ subsequent actions eliminated any payment obligation. At
base, plaintiffs-appellees cannot state a claim that they were harmed by SBA’s alleged
violation of a non-money-mandating statute.
ARGUMENT
I. Standard of Review
Subject-matter jurisdiction is a question of law that the Court reviews de novo.
Litecubes, LLC v. Northern Light Products, Inc., 523 F.3d 1353, 1358 (Fed. Cir. 2008).
The Court also “reviews without deference the trial court’s statutory interpretation.”
Samish Indian Nation v. United States, 419 F.3d 1355, 1364 (Fed. Cir. 2005). The
plaintiff bears the burden of establishing jurisdiction. Hopi Tribe v. United States, 782
F.3d 662, 666 (Fed Cir. 2015).
II. The Trial Court Erred Because Section 9009c is Not Money-Mandating
A. Tucker Act Claims and the Money-Mandating Requirement
The Tucker Act authorizes the Court of Federal Claims to exercise jurisdiction
over claims “founded either upon the Constitution, or any Act of Congress or any
regulation of an executive department, or upon any express or implied contract with
the United States, or for liquidated or unliquidated damages in cases not sounding in
12
tort.” 28 U.S.C. § 1491(a)(1). However, the Tucker Act “does not create any
substantive right enforceable against the United States for money damages.” United
States v. Testan, 424 U.S. 392, 398 (1976). In order to come within the waiver of
sovereign immunity stated in the Tucker Act, a plaintiff must identify a “money-
mandating” source of substantive law that creates the right to money damages.
Lummi Tribe of the Lummi Rsrv. v. United States, 870 F.3d 1313, 1317 (Fed. Cir. 2017)
(citing United States v. Mitchell, 463 U.S. 206, 216 (1983); Testan, 424 U.S. at 398).
A statute is money-mandating if it can fairly be interpreted as mandating
compensation by the Federal Government for damages sustained. Me. Cmty. Health
Options v. United States, 590 U.S. 296, 322 (2020) (citing United States v. White Mountain
Apache Tribe, 537 U.S. 465, 472 (2003)). The Court must examine whether the sources
of law relied upon by a plaintiff mandate “compensation for damages sustained as a
result of a breach of the duties they impose.” Mitchell, 463 U.S. at 219. Crucially,
“[n]ot every claim invoking the Constitution, a federal statute, or a regulation is
cognizable under the Tucker Act.” Id. at 216. “[A] plaintiff seeking to invoke the
court’s jurisdiction must present a claim for ‘actual, presently due money damages
from the United States.’” Nat’l Air Traffic Controllers Ass’n v. United States, 160 F.3d
714, 716 (Fed. Cir. 1998) (quoting United States v. King, 395 U.S. 1, 3 (1969)).
B. Section 9009c is Not Money-Mandating Under Maine Community
Health and Other Precedent
In its opinion, the trial court found section 9009c to be money-mandating
13
based on isolated pieces of the language of sections 9009c(b)(3) and 9009c(c)(1).
Appx16-23. Section 9009c(b)(3) established the RRF program and stated that “[t]he
Administrator shall use amounts in the Fund to make grants described in subsection
(c)[.]” 15 U.S.C. § 9009c(b)(3). Section 9009c(c)(1) stated that “the Administrator
shall award grants to eligible entities in the order in which applications are received by
the Administrator.” Id. at § 9009c(c)(1). The trial court concluded the statute was
money-mandating “by its plain terms.” Appx23.
However, the trial court did not compare the language of section 9009c(b)(3)
and section 9009c(c)(1) to known money-mandating statutes. Performing this
exercise establishes that the trial court erred. Section 9009c is dissimilar to statutes
that have genuinely created a payment obligation on the part of the Government.
The most recent Supreme Court decision finding a statute to be money-mandating,
Maine Community Health, exemplifies these differences.
Maine Community Health addressed the Affordable Care Act (ACA), which
expanded healthcare coverage and created online marketplaces where insurers could
sell plans. 590 U.S. at 300. The ACA contained several initiatives to encourage
insurers to participate and to defray their costs and risks. Id. In particular, the “Risk
Corridors” program was meant to “compensate insurers for unexpectedly
unprofitable plans during the marketplaces’ first three years.” Id.
The statute creating the Risk Corridors program stated that the agency “shall
14
establish and administer a program of risk corridors for calendar years 2014, 2015,
and 2016” under which a qualified health plan “shall participate in a payment
adjustment system based on the ratio of the allowable costs of the plan to the plan’s
aggregate premiums.” 42 U.S.C. § 18062(a). The agency “shall provide” that if an
insurance plan lost a specified amount of money, then the agency “shall pay to the
plan” a certain amount based on a calculation stated in the statute. See id. at
§ 18062(b)(1). Conversely, if the plan made a certain amount of money, the plan
“shall pay” the agency. Id. at § 18062(b)(2). The plaintiffs were insurers who
experienced losses under the Risk Corridors program but had not been paid due to a
lack of appropriated funds. Me. Cmty. Health, 590 U.S. at 304-06. The plaintiffs
sought a money judgment for these unpaid sums. Id. at 305-06.
The Supreme Court concluded that the Risk Corridors statute “imposed a legal
duty of the United States that could mature into a legal liability” through the insurers’
participation in the healthcare exchanges. Id. at 310. This conclusion flowed from the
statute’s “express terms and context,” in particular its use of mandatory language. Id.
Such mandatory language is “significant.” Id. at 324.
The statute could fairly be interpreted as money-mandating because the phrase
“shall pay” demonstrated Congress’ intent to “create both a right and a remedy under
the Tucker Act.” Id. at 324 (quoting Bowen v. Mass., 487 U.S. 879, 906 (1988)). In
particular, the Supreme Court referenced the statute’s “triple mandate” that the
15
agency “shall establish and administer” the program, “shall provide” for payment
according to the statutory formula, and “shall pay” qualifying insurers. These features
put the statute “comfortably within” the class of money-mandating statutes. Id. at
324-25. Id. The Supreme Court also noted that money-mandating provisions are
“uncommon.” Id. at 324.
In the instant case, the trial court failed to perceive the difference between the
mandatory language needed for Congress to establish a benefits program and the type
of mandatory language that creates a payment right and a remedy for specified
members of the public. The trial court, without citing Maine Community Health, stated
that it was relying on the “shall use” and “shall award” language in sections
9009c(b)(3) and (c)(1) “to find the statute money-mandating by its plain terms,”
suggesting that it found this usage of the word “shall” dispositive. Appx23.
However, the trial erred by not considering the statute’s “express terms and context.”
See Me. Cmty. Health, 590 U.S. at 310.
At most, section 9009c(b)(3) required that SBA “shall use the amounts in the
Fund to make grants,” established the RRF program, and prevented SBA from using
the $28.6 billion appropriation for some other purpose. This provision is akin to the
first part of the Risk Corridors statute’s “triple mandate,” namely that the agency shall
“establish and administer” the program. However, if Congress’ general creation of a
grant program was sufficient to be money-mandating, even in the absence of any
16
specific “shall pay” requirement, then the Supreme Court would not have had to
perform any further analysis in Maine Community Health and money-mandating statutes
would be far from uncommon. The trial court’s reasoning therefore cannot be
correct.
Similarly, the trial court ignored the full wording of section 9009c(c)(1). This
provision indeed states that SBA “shall award grants to eligible entities,” but the
remainder of the sentence, the instruction to award grants in the order in which
applications are received, cannot be erased or removed. Statutes found to be money-
mandating have not been directions on how the agency should make awards in general
but instead have directly stated a payment mandate and specified a group to which the
Government shall make the payment.
For example, in Maine Community Health, the subject of the “shall pay” language
was a particular group, specifically insurers with unprofitable plans. 590 U.S. at 310.
Further, in terms of this Court’s recent decisions, Greenlee County and Prairie County
found the Payment in Lieu of Taxes Act (PILT) to be money-mandating. PILT stated
that “the Secretary of the Interior shall make a payment for each fiscal year to each
unit of general local government in which entitlement land is located . . . .” Greenlee
County, Ariz., v. United States, 487 F.3d 871, 877 (Fed. Cir. 2007); see also Prairie Couty,
Mont. v. United States, 782 F.3d 685, 686 (Fed. Cir. 2015). Going further back, in
Kanemoto v. Reno, the Court examined a statute aimed at providing restitution to
17
individuals of Japanese descent who were interned during World War II. 41 F.3d 641,
643, 646 (Fed. Cir. 1994). The statute provided that the Attorney General shall pay
the sum of $20,000 “to each eligible individual,” with eligibility further defined in the
statute and regulations. Id.
Here, however, section 9009(c)(1) does not contain the same type of wording,
an actual command for SBA to make payment to a defined group, as in Maine
Community Health, Greenlee County, Prairie County, and Kanemoto. The “shall award grants
to eligible entities” language of section 9009(c)(1) does not stand alone, but is
definitively coupled with an instruction to SBA to make awards “in the order in which
applications are received.” If Congress had intended to create an obligation to pay
grants to all eligible entities or any specified subset of eligible applicants, such as, for
example, first-day applicants, it would have said so directly. We are not aware of any
case in which a similar type of administrative instruction to an agency was found to be
money-mandating and none were cited by the trial court.
But if section 9009c is not analogous to any other money-mandating statute,
why did the trial court determine that the statute entitled plaintiffs to compensation?
It appears from the decision below that the trial court determined that section 9009c
created an “individual right” or “limited mandated” for an applicant (depending upon
the order in which that applicant applied).
Specifically, the trial court made contradictory statements as to the meaning of
18
the statute’s language, which should have confirmed that the statute does not fit
comfortably within Tucker Act jurisdiction. The trial court first cautioned that
section 9009c “is not an unlimited money-mandate requiring the payment of grants to
all eligible entities.” Appx19. “In other words, the statute does not provide a general
entitlement and is not a money-mandating grant to all eligible entities; instead the
provision requires the use of a specific fund of money to be awarded to eligible
entities in a specified order until the funds are exhausted.” Id.
Nonetheless, the trial court then stated that the requirement in section
9009c(b)(3) that SBA make grants and do so in the order specified by section
9009c(c)(1) “gave each eligible applicant an individual right to receive payment before
any later applicant.” Appx22. The trial court also described this “individual right” as
the right for eligible entities to received awards based on a “first-come, first served”
basis. Appx19. According to the trial court, “[i]t does not matter that section 9009c
does not literally command payment to all eligible entities because of the limited
funding provided to the RRF, what matters is that the plaintiffs fall within the scope
of section 9009c’s money-mandate.” Appx22.
Then, despite its previous statement that section 9009c does not require the
payment of grants to all eligible entities, Appx19, the trial court explained that when
the statutory provisions are read together, it was clear that section 9009c required SBA
“to award grants to all eligible applicants, the hallmark of a money-mandating statute,
19
until the RRF was exhausted.” Appx23. But the trial court formulated its overall
conclusion somewhat differently – section 9009c is money-mandating, “but it is a
limited mandate applying only to the money within the RRF because section
9009c(b)(3) only requires making awards to applicants out of the money available
within the RRF.” Appx23.
The trial court failed to properly apply Maine Community Health and other cases
that provide examples of when a statute can fairly be interpreted as money-mandating.
The trial court thus invented new concepts when it spoke of a plaintiff falling within
the scope of a “money-mandate” generated out of a statute that does not command
payment, a “limited mandate,” or that section 9009c(c)(1) created an inchoate
“individual right” for each eligible applicant to receive a grant before any later
applicant that can be vindicated through money damages. But the much simpler and
correct reasoning, based on precedent, is that section 9009c required SBA to operate
the RRF program and give out the appropriated funds in a certain order of
disbursement, but did not create any mandatory payment obligation to any or all
applicants to the program, such that plaintiffs-appellees are now owed money because
they did not receive grants. As such, the trial court failed to properly apply Maine
Community Health and other cases that provide examples of when a statute can fairly be
interpreted as money-mandating.
20
C. The Trial Court Erred In Reading Implied Money-Mandating
Obligations Into Non-Monetary Administrative Requirements
Perhaps the trial court’s misinterpretation of section 9009c can be explained by
plaintiffs-appellees’ failure to bring a standard claim for a violation of a money-
mandating statute. Plaintiffs-appellees do not simply claim that they submitted
eligible applications but were not awarded grants, contrary to a statutory payment
mandate. Instead, they put forth an indirect theory that section 9009c required SBA
to award RRF grants in the order that applications were received and that SBA’s
decision to award grants instead in the order that applications were processed, along
with other issues, misallocated the limited funding to applicants who had applied later
in time, or were ineligible to receive an RRF award. Plaintiffs-appellees attribute the
fact that they did not receive RRF grants to SBA’s alleged unlawful, arbitrary,
capricious, and negligent acts or omissions.
In order to address this unusual theory, the trial court incorrectly substituted
the idea that SBA lacked discretion in administering the RRF program for the
necessary money-mandating language. The trial court held that SBA did not have
authority to refuse to make a grant, to reject any otherwise eligible applicant, or to
deny an award to any eligible entity. Appx17-19. The trial court then analyzed the
word “received” in section 9009c(c)(1), and raised various concerns about fairness to
applicants, to determine that SBA was required to use a strict line order. Appx18-21.
As stated above, the trial court held that due to this lack of discretion, section 9009c
21
contained a “money-mandate” that “each eligible applicant” had an “individual right”
to receive payment before any later applicant. Appx22.
The trial court’s faulty logic turned an instruction to SBA to award grants in the
order in which applications were received into a “money-mandate” providing
jurisdiction over plaintiffs-appellees’ claims that they would have received grants if
SBA had not arbitrarily used processing order to dole out the money. Appx22-23.
However, the trial court’s reasoning is in conflict with well-established precedent.
The Court of Claims long ago rejected reading into statutes an implied right of
compensation for wrongful Government decisions or actions. See Eastport S. S. Corp.
v. United States, 372 F.2d 1002, 1009 (Ct. Cl. 1967) abrogated in part on other grounds by
Malone v. United States, 849 F.2d 1441, 1444-45 (Fed. Cir. 1988).
Indeed, the Court of Claims’ explanation in Eastport of its jurisdiction and its
refusal to extend that jurisdiction demonstrates the trial court’s error here. In Eastport,
the plaintiff sought damages for the Maritime Commission’s failure to timely approve
the sale of a repurposed ex-German ship to a Danish company pursuant to section 9
of the Shipping Act, which caused the plaintiff to lose that contract opportunity. Id.
at 1005-06. The key question was therefore whether section 9 of the Shipping Act
could be read to grant the plaintiff compensation for the business loss it incurred. Id.
To answer this question, the Court of Claims reviewed “the historical
boundaries” of the Court’s jurisdiction and found that it excluded instances in which
22
“the basis of the federal claim – be it the Constitution, a statute, or a regulation –
cannot be held to command, in itself and as correctly interpreted, the payment of
money to the claimant, but in which some other principle of damages has to be
invoked for recovery.” Id. at 1008. The Court of Claims gave the example that a
Federal criminal defendant who has been “invalidly convicted or deprived of his
liberty because of a violation of the Constitution or an Act of Congress cannot obtain
compensation under 28 U.S.C. § 1491 for his loss,” outside of specific legislation
covering unjust convictions or civil rights violations. Id. at 1009.
On its face, section 9 of the Shipping Act was a “regulatory measure” that
forbade foreign sale of a vessel originally purchased from the Maritime Commission
unless the Maritime Commission approved and authorized the sale. Id. The Court of
Claims explained that neither the statute’s text nor its legislative history suggested that
“the United States will compensate an applicant who suffers a business loss because
of the Commission’s improper failure to grant the request.” Id. Indeed, “[t]here is no
decision of this or any other federal court holding or intimating that the United States
will be liable under the Tucker Act for such a commercial injury resulting from a
failure or wrong done in the course of the regulatory process.” Id. Eastport therefore
eliminates plaintiffs-appellees’ theory that the Government is liable for money
damages to make up for harms that their businesses suffered when they did not
receive RRF grants due to SBA’s failure to award grants in the order in which
23
applications were received.
Even more, Eastport rejects the trial court’s invocation of an implied money-
mandating “individual right” in section 9009c(c)(1) to have SBA award grants in a
certain order. The Court of Claims declined to read an “unexpressed summons to
compensate plaintiff for its business loss” into the “mass of other regulatory and
prohibitory activities of the Federal Government (including criminal prosecutions)
which can and do cause pecuniary loss if improperly conducted . . . .” Id. at 1009-10.
The Court of Claims would “have to break entirely new and treacherous ground to
find in [s]ection 9 an implied directive to allow such compensation.” Id. at 1009. “A
wholly new ground of obligation would be summarily created by mere implication
from statutes which say nothing to suggest such pecuniary responsibility.” Id. at 1010.
Given that a claim of “liability for damages occasioned by wrongful regulatory action
smacks more of tort than of non-tortious obligation,” the Court of Claims refused to
find in section 9 any “implied direction to compensate plaintiff.” Id.
Nor is Eastport the only case that has rejected implied rights of compensation in
non-pecuniary statutes. In Testan, the Supreme Court addressed the claims of two
Government attorneys seeking reclassification of their positions to GS-14 level
pursuant to the Classification Act. Testan, 424 U.S. at 393-94. It was “implicit in the
[lower] court’s decision” that a “violation of the Classification Act gives rise to a claim
for money damages for pay lost by reason of the allegedly wrongful classifications.”
24
Id. at 399. However, the Supreme Court analyzed the Classification Act and held that
it did not contain any provision that “expressly makes the United States liable for pay
lost through allegedly improper classifications.” Id.
The Supreme Court rejected the position that the Tucker Act “fundamentally
waives sovereign immunity with respect to any claim invoking a constitutional
provision or a federal statute or regulation . . . .” Id. at 400. The Supreme Court
specifically stated that it regarded as “unsound the argument of amici that all
substantive rights of necessity create a waiver of sovereign immunity such that money
damages are available to redress their violation.” Id. Testan thus also rejects the trial
court’s view that it possesses jurisdiction to entertain plaintiffs-appellees’ claims of
money damages borne from SBA’s alleged violation of section 9009c(c)(1).
The trial court’s error would turn a wide variety of alleged agency failures in
managing a benefits program into “individual rights” to money damages. For
example, plaintiffs-appellees’ complaint alleges that SBA failed to weed out fraudulent
applicants and that SBA misspent substantial amounts of the $28.6 billion based on
fraud. Appx63, Appx73, Appx74, Appx77-79. There was obviously no discretion for
SBA to award money to fraudsters, even inadvertently, and section 9009c requires
payment to only “eligible entities.”
Under the trial court’s conception of a money-mandating statute, SBA’s alleged
failure to implement proper payment controls could be framed as an “individual
25
right” to money damages. Hence plaintiffs-appellees could assert that the statute
established an “individual right” for each eligible applicant to receive payment over
fraudulent, ineligible entities, that they thus fall within a money-mandate, and that
they can demand money damages to compensate for not receiving grants because the
money that should have gone to them was wasted due to SBA’s loose fraud controls.
However, not every “failure to perform an obligation” creates a right to
monetary relief against the Government. Me. Cmty. Health, 590 U.S. at 322 (quoting
United States v. Bormes, 568 U.S. 6, 16 (2012)). It is insufficient to create Tucker Act
jurisdiction that a “decision will ultimately enable the plaintiff to receive money from
the government.” Nat’l Air Traffic Controllers Ass’n, 160 F.3d at 716 (citing United States
v. King, 395 U.S. 1, 4 (1969)). The trial court erred by reading into sections
9009c(b)(3) and 9009(c)(1) an implied direction to compensate plaintiffs-appellees for
any financial harms incurred when they did not receive grants due to SBA’s alleged
misallocation of the money to applicants who applied later in time. Section 9009c is
not money-mandating and the trial court erred in this fundamental determination of
its jurisdiction.
D. The Trial Court Erred in Relying On Cases That Discuss When a
Discretionary Statute is Money-Mandating
The trial court also held that even if the “shall use” and “shall award” language
in sections 9009c(b)(3) and 9009c(c)(1) “simply authorized the Administrator to make
awards, section 9009c would still be money-mandating because it would meet each of
26
the three prongs of the test for determining if a discretionary statute is money-
mandating.” Appx23 (citing Samish Indian Nation, 419 F.3d 1355, 1364-65 (Fed. Cir.
2005); Doe v. United States, 463 F.3d 1314, 1324 (Fed. Cir. 2006); Perri v. United States,
340 F.3d 1337, 1342-43 (Fed. Cir. 2003)). These cases speak to when a statute that
appears to give an agency discretion “over the decision whether or not to pay an
individual or group” is actually money-mandating. Doe, 463 F.3d at 1324. For this
type of situation, the Doe Court set forth a test that examines if: “(1) the statute has
‘clear standards for paying’ money to recipients, (2) the statute specifies ‘precise
amounts’ to be paid, or (3) the statute compels payment once certain conditions
precedent are met.” Id. (quoting Samish Indian Nation, 419 F.3d at 1364-65).
The trial court again ignored the differences in language between statutes found
to be money-mandating under this three-part test and section 9009c. In Doe, the
statute in question stated that “[t]he head of an agency, with the approval of the
Office of Personnel Management, may provide that . . . an employee in a position in
which the hours of duty cannot be controlled administratively, and which requires
substantial amounts of irregular, unscheduled overtime duty . . . shall receive premium
pay for this duty . . . .” Doe, 463 F.3d at 1324-25 (citing 5 U.S.C. § 5545(c)(2)). Even
though the statute used the word “may,” the Court found it to be money-mandating
because once an agency determined that a particular position is entitled to this type of
pay, the employee “shall” receive premium pay. Id. at 1325.
27
However, section 9009c does not contain any similar language that all eligible
applicants or some subset of eligible applicants “may” be paid or that they “shall” be
paid after SBA makes some discretionary determination. Such direct payment
language, whether framed in discretionary or mandatory terms, is entirely absent from
section 9009c. There is no “individual or group” specified for payment at all in
section 9009c. See id. at 1324. Section 9009c does not contain facially discretionary
language that plaintiffs-appellees seek to interpret as money-mandating. The trial
court erred by finding this line of cases to even be relevant.6
Furthermore, the trial court failed to perceive that the facts and holding of
Samish Indian Nation actually instruct against reliance on an agency’s limited discretion
in an administrative matter to create an implied right of compensation. In Samish
Indian Nation, the plaintiff tribe claimed entitlement to benefits from 1969 to 1996
under the Indian Self-Determination and Education Assistance Act (ISDA) on the
theory that but for Federal misconduct they would have received Federal benefits
since 1969. 419 F.3d at 1358. ISDA obligates the Government to pay benefits to
tribes under self-determination contracts, but only Federally recognized tribes can
obtain such contracts. Id. at 1362-63. The tribe argued that the Government’s refusal
6
Perri also does not bolster the trial court’s opinion. The statute in that case
created a fund to make payments “at the discretion of the Attorney General” for
“awards for information or assistance leading to a civil or criminal forfeiture involving
any Federal agency . . . .” 340 F.3d at 1341 (citing 28 U.S.C. § 524).
28
to accord them Federal recognition wrongfully prevented them from obtaining a
contract. Id. at 1362.
Although the tribe argued that the agency did not have discretion to refuse to
make a self-determination contract upon request of a tribe, the Court found the
“reliance on that limited discretion misplaced” and the agency’s lack of discretion to
enter into a self-determination contract to be irrelevant to the jurisdictional question
of whether the statute was money-mandating. Id. at 1365. The Court concluded that
ISDA did not demonstrate “congressional intent to allow the Samish to seek damages
for contract support costs never incurred, on contracts never created, based on a
wrongful refusal to accord federal recognition.” Id. Furthermore, the statute did not
express any intent to establish a damages remedy for non-payment of benefits absent
the existence of self-determination contract. Id. at 1365-67.
In essence, the Court rejected the Samish’s counterfactual theory of recovery
that the tribe would have obtained a contract and thus benefits had the Government
not wrongfully refused recognition. Plaintiffs-appellees similarly rely on the
counterfactual idea that they would have received grants had SBA not wrongfully
awarded grants in the order applications were processed, not the order that
applications were received. However, Samish Indian Nation establishes, as in Eastport,
the principle that a statute removing an agency’s discretion to take some non-
pecuniary action cannot be turned into an implied money-mandate allowing
29
jurisdiction over a claim for money damages if that action does not occur.
III. The Trial Court’s Decision is Contrary to the Court’s Precedent
Regarding Grant Programs
The trial court’s decision also conflicts with the Court’s binding precedent
regarding grant programs, specifically Lummi and National Center for Manufacturing
Sciences (National Center). In Lummi, the Court reversed, on interlocutory appeal, the
trial court’s determination that the Native American Housing Assistance and Self-
Determination Act of 1996 (NAHASDA) was money-mandating. 870 F.3d 1313,
1315 (Fed. Cir. 2017). The relevant sections of NAHASDA required the agency to
make grants for affordable housing to Indian tribes based on a specific regulatory
formula. Id. Once awarded, grantees were limited in how and when they could
dispense the funds, which could be used only on statutorily specified activities in
accordance with program requirements. Id. The agency determined that it had made
overpayments and deducted these amounts from subsequent grant allocations. Id.
The plaintiff tribe claimed that the agency misapplied the NAHASDA formula when
it calculated the overpayment and thus improperly deprived them of grant funds. Id.
at 1316.
Notably, the basis for the trial court’s opinion that NAHASDA was money-
mandating was that the statute left “no room for [the agency] to exercise discretion in
making grants.” Lummi Tribe of the Lummi Rsrv. v. United States, 99 Fed. Cl. 584, 594
(2011). The trial court pointed to statutory language providing that the agency “shall .
30
. . make grants,” “shall allocate any amounts” among Indian tribes that complied with
certain requirements, and directed that the funding allocation be made pursuant to a
particular formula. Id. According to the trial court, the agency was “bound by the
statute to pay a qualifying tribe the amount to which it is entitled under the formula”
and thus NAHASDA could fairly be interpreted as mandating the payment of
compensation by the Government. Id.
The trial court’s erroneous reasoning in Lummi has strong similarities to the
trial court’s opinion in the instant case, which also relied on the idea that SBA lacked
discretion in making RRF grants. See Appx16-23. However, on appeal, this Court did
not find any mandatory language or supposed lack of discretion in the agency making
grants to be dispositive. This Court reversed and concluded that under NAHASDA
“the Tribes are not entitled to an actual payment of money damages, in the strictest
terms; their only alleged harm is having been allocated too little in grant funding.”
Lummi, 870 F.3d at 1318. The Court concluded that the Tribes claims were ultimately
equitable in nature. Id. at 1317. The same is true of plaintiffs-appellees here. Their
only alleged harm is that they did not receive RRF grants because SBA arbitrarily and
capriciously misallocated the funding to other entities who applied later in time.
Furthermore, Lummi requires reversal of the trial court’s decision because the
RRF program also only gave out “strings-attached disbursement[s].” Id. The Court
found it significant that the Tribes were restricted in their use of NAHASDA funds
31
for certain purposes and held that “[t]o label the disbursement of funds so thoroughly
scrutinized and cabined as a remedy for ‘damages’ would strain the meaning of the
term to its breaking point.” Id. at 1318. The NAHASDA grants could also be “later
reduced or clawed back.” Id. Based on these limitations, the Court concluded that
“the underlying claim is not for presently due money damages” but instead merely for
a larger “strings-attached” grant. Id. at 1319.
The same logic applies to plaintiffs-appellees’ claim here. Recipients of RRF
grants were limited by statute to use the funds for specified categories of expenses.
See 15 U.S.C. § 9009c(c)(5). The RRF program also mandated that awardees could
only use the grants for expenses incurred during the statutory “covered period.” See
id. at § 9009c(a)(3). Awardees were required to return any unused funds to the
Treasury at the end of the “covered period” or if they went out of business before
that date. See id. at § 9009c(c)(6). Plaintiffs-appellees do not make a claim for
presently due money-damages, but to obtain compensation for not receiving a strings-
attached grant.
The Court’s earlier decision in National Center also supports reversal. In that
case, the Court examined whether a district court possessed jurisdiction to entertain a
grant claim under the APA and therefore erred in transferring the case to the Court of
Federal Claims. Nat’l Ctr. for Mfg. Scis. v. United States, 114 F.3d 196, 197 (1997). At
issue was the Department of Defense Appropriations Act for Fiscal Year 1994, which
32
appropriated $12 billion and stated that “$40,000,000 of the funds appropriated in this
paragraph shall be made available” for the plaintiff, a not-for-profit research and
development consortium, to assist in a particular research program. Id. at 197-98.
When the Air Force only made a portion of the sum available, the plaintiff sued for
the remainder. Id. at 198.
The Court concluded that the case belonged in district court because the true
nature of the claims presented was not amenable to Tucker Act jurisdiction. In
reaching that conclusion, the Court focused on the limitations contained in the statute
on the use of the funds. The Court noted that the grantee “would not be entitled to a
monetary judgment that would allow it to use the funds appropriated under the Act
for any purpose, without restriction,” and that, in light of the “restrictions governing
the manner in which money may be allocated” it was reasonably clear that “a simple
money judgment” would not be an appropriate remedy. Id. at 201.
The same is true here. The trial court acknowledged that any award of money
damages would come from the Judgment Fund and “would not be subject to the
RRF’s requirement to return grant funds nor the Fiscal Responsibility Act’s recission
of funds . . . .” Appx26. Allowing plaintiffs-appellees to receive money damages
“equal to the amounts sought in their unpaid grant applications,” Appx1, would allow
plaintiffs-appellees to avoid the strings-attached nature of the RRF program and its
requirement to use or give back the funds by the end of the “covered period.”
33
Section 9009c does not entitle plaintiff-appellees to receive a payment now, five years
after the pandemic started, for any purpose, without restriction. The trial court’s
reasoning is counter to Lummi and National Center and should be reversed on this
basis.
IV. The Trial Court Misunderstood the Scope of Tucker Act Jurisdiction
In our motion to dismiss, we argued that plaintiffs-appellees’ central allegations
that SBA engaged in numerous unlawful and arbitrary and capricious acts and
omissions, were only, at best, a disguised APA claim. See Appx9. It is the APA that
waives sovereign immunity to allow a person suffering legal wrong because of final
agency action to obtain judicial review. Section 706 of the APA empowers courts to
“hold unlawful and set aside agency action, findings, and conclusions” that are
“arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with
law,” “in excess of statutory jurisdiction,” or “without observance of procedure
required by law[.]” 5 U.S.C. § 706(2)(A), § 706(2(C), § 706(2)(D).
As support, we pointed to the Supreme Court’s delineation between the Tucker
Act and APA waivers of sovereign immunity in Bowen v. Massachusetts and this Court’s
decision in Katz v. Cisneros. We noted that this Court has expressly held that the trial
court does not possess jurisdiction over APA claims. See, e.g., Martinez v. United States,
333 F.3d 1295, 1313 (Fed. Cir. 2003). Despite its secondary placement in our motion
to dismiss behind our arguments that section 9009c is not money-mandating, the trial
34
court made this issue the centerpiece of its decision. In so doing, the trial court
misunderstood the delineation between the Tucker Act and APA, brushed aside
binding precedent, and incorrectly primed itself to read section 9009c as money-
mandating.
A. The Trial Court Erred by Preemptively Determining that
Plaintiffs-Appellees’ Claims Come Under Tucker Act Jurisdiction
Before considering the money-mandating issue, the trial court cast its eye over
the alleged “scope” of plaintiffs-appellees’ claims and found them to be genuinely
within the Tucker Act’s waiver of sovereign immunity. Appx10-15. The trial court
stated that it was following this Court’s decision in Suburban Mortgage in performing
this analysis. Appx10. To determine whether a claim falls under the APA or the
Tucker Act, the proper analysis is whether the Court of Federal Claims could provide
an “adequate remedy” for the alleged wrong, pursuant to section 704 of the APA. Id.
(citing Suburban Mortgage Associates, Inc. v. United States, 480 F.3d 1116, 1125 (Fed. Cir.
2007)). However, the trial court erroneously made a preemptive determination that it
possessed jurisdiction based only on plaintiffs-appellees’ own characterization of their
claims and the nature of the relief that they requested.
The trial court repeatedly emphasized that plaintiffs-appellees’ cause of action
is “explicitly limited to a claim for money damages under the Tucker Act.” Appx10,
Appx15. The trial court accepted plaintiffs-appellees’ circular argument that because
they seek a payment of money from the Government, money damages would be a
35
legally available and appropriate remedy that the trial court could order.7 Id. Even
more, the trial court suggested that if a plaintiff’s “goal” is to obtain a money
judgment, then the court must consider itself as the “putatively correct forum” for the
claim. Appx12-13 (citing Matthew H. Solomson, Court of Federal Claims
Jurisdiction, Practice, and Procedure, 29.IV.A (2016)). The trial court also found it
significant for making out a Tucker Act claim that plaintiffs-appellees did not request
any type of prospective, injunctive relief in their complaint. Appx13-15.
The trial court’s analysis runs counter to the basic principle that the Tucker Act
itself “does not create any substantive right enforceable against the United States for
money damages.” Testan, 424 U.S. at 398. There is no basis in the law for the trial
court giving its initial impressions that the case feels like a Tucker Act suit without
analyzing whether it indeed possesses jurisdiction. Indeed, the trial court
misunderstood the Court’s instruction in Suburban Mortgage. In Suburban Mortgage, the
Court plainly explained that if plaintiff’s complaint can be read as seeking monetary
relief, the ability of the Court of Federal Claims to provide an “adequate remedy”
7
The trial court also addressed the inconvenient fact that plaintiffs-appellees’
complaint is replete with exceedingly non-Tucker Act language of arbitrary and
capricious acts and omissions on the part of SBA. According to the trial court,
plaintiffs-appellees’ complaint is “inartful” and contains “much superfluous and
useless rhetoric to add atmospherics to the claim.” Appx15. However, the trial court
decided that this wording, which states plaintiffs-appellees’ own theory of why they
should recover damages, could be ignored because plaintiffs-appellees did not
“explicitly” state a cause of action under the APA and did not claim to rely on the
APA to obtain the trial court’s jurisdiction. Appx15-16.
36
turns on whether the jurisdictional requirements of the Tucker Act are satisfied.
Suburban Mortg. Assocs., Inc., 480 F.3d at 1126.
Here, because section 9009c is not money-mandating, the jurisdictional
requirements of the Tucker Act are not satisfied and the trial court cannot provide an
“adequate remedy.” Section 704 of the APA thus does not present a barrier to
recognizing that plaintiffs-appellees’ challenge to SBA’s method and order of
awarding grants is, at best, a disguised equitable claim. Plaintiffs-appellees’ request for
money damages cannot create jurisdiction at the trial court or avoid district court
jurisdiction and the associated standing and mootness issues. The trial court erred by
focusing on plaintiffs-appellees’ desire for a monetary remedy and not the statutory
basis for the court’s jurisdiction to provide that remedy.
By discussing the “scope” of plaintiffs-appellees’ claims as falling within the
Tucker Act in some general sense first, the trial court erroneously primed itself to
look for a way to make section 9009c money-mandating. The trial court should have
first found the statute to not be money-mandating and then determined whether
another court would possess jurisdiction and if a transfer would be appropriate.8
8
We have consistently argued that although this matter could potentially be
transferred to district court, see 28 U.S.C. § 1631, it would not be in the interest of
justice to do so because such a transfer would be futile. See Little River Lumber Co. v.
United States, 7 Cl. Ct. 492, 494 (1985) (citing Dancy v. United States, 229 Ct. Cl. 300, 308
(1982)). As explained in the statement of the case, several district courts have held
that similar plaintiffs lack standing or the matter is moot.
37
B. The Trial Court Erred by Failing to Properly Apply Bowen
Plaintiffs-appellees’ request for monetary compensation for various agency
wrongs does not move a case into the jurisdiction of the Court. The Supreme Court
explained the delineation between the Tucker Act and APA waivers of sovereign
immunity in Bowen. In Bowen, the Commonwealth of Massachusetts brought suit in
district court challenging the refusal of the Secretary of Health and Human Services to
reimburse it for funds it expended under a Medicaid program and the court of appeals
affirmed in favor of the State. See 487 U.S. at 885-89. In its petition for certiorari, the
Secretary argued that the Claims Court had exclusive jurisdiction over the claim, not
the district court. Id. at 890-91.
The Supreme Court rejected this argument, holding that the relief sought by
the State, the release of Medicaid funds, was not “money damages,” and that the case
was not excluded from the waiver of sovereign immunity in section 702 of the APA.
Id. at 893. In particular, the Supreme Court noted that the State’s case “is not a suit
seeking money in compensation for the damage sustained by the failure of the Federal
Government to pay as mandated; rather, it is a suit seeking to enforce the statutory
mandate itself, which happens to be one for the payment of money.” Id. at 900
(emphasis in original). Any payment made by the Government would be “a mere by-
product of [the district court’s] primary function of reviewing the Secretary’s
interpretation of federal law.” Id. at 910.
38
Here, similarly, plaintiffs-appellees are attempting to enforce what they assert is
the statutory mandate in section 9009c(c)(1) for SBA to award grants in the order that
applications were received. By extension, they seek the payment of money that they
believe that they would have received if SBA had awarded grants in that order. As in
Bowen, any money paid would not be in compensation for an injury or labor, but
would be a byproduct of a determination that SBA misinterpreted section 9009c(c)(1)
and awarded grants in the “wrong” order.
The trial court, however, rejected our argument based on its conclusion that
the Supreme Court’s holding in Bowen “has been narrowly interpreted by the Federal
Circuit.” Appx12. The trial court identified a purported “effort to limit Bowen to the
nature of the underlying statutory regime” in this Court’s decisions in Consolidated
Edison and Suburban Mortgage. Id. However, neither of these decisions expresses any
actual intent or effort on the part of the Court to narrowly interpret or limit the
application of Bowen going forward.
The trial court read far too much into this Court’s distinguishing of Bowen in
two cases that presented different factual and legal circumstances. In Suburban
Mortgage, the Court addressed the proper forum for a dispute between the plaintiff and
the Department of Housing and Urban Development (HUD) over a contract for
insurance. Suburban Mortgage Assocs., Inc., 480 F.3d at 1117. The plaintiff sued in
district court for specific performance of the contract and a declaratory judgment,
39
with the aim of obtaining “the money allegedly due it under the insurance agreement.”
Id. The district court denied the Government’s motion to dismiss or transfer, relying
on Bowen for the idea that the plaintiff was not seeking money damages, but instead
money “that HUD was obligated to pay under the agreement.” Id. at 1120. The
Government brought an interlocutory appeal to this Court pursuant to 28 U.S.C. §
1292(d)(4)(A).
The Court first reviewed the historical boundary between the Tucker Act and
APA waivers of sovereign immunity. Id. at 1122. As this Court explained, a plaintiff
seeking something other than monetary relief from a “disputed government agency
action could challenge that action in district court under the APA.” Id. Conversely,
“a suit requesting relief in the form of a money judgment against the Government
could be brought in the Court of Federal Claims under the Tucker Act, but not in a
district court.” Id.
The Court then characterized Bowen as a “leak that has threatened to become a
gusher” in the “relatively watertight barrier” that had existed between the Tucker Act
and APA. Id. The Court decried the new “cottage industry” of lawyers who
attempted to craft suits seeking money from the Government as “suits for declaratory
or injunctive relief without mentioning the money.” Id. at 1124. The Court criticized
attempted forum shopping aimed at avoiding the jurisdiction of the Court of Federal
Claims and the Federal Circuit. Id.
40
With this background, the Court held that the plaintiff’s claim, being in essence
for breach of contract, belonged at the Court of Federal Claims, and that the Court of
Federal Claims could order the “adequate remedy” of expectation damages. Id. at
1126-27. The plaintiff had relied on Bowen to argue that a money judgment would not
be adequate. Id. at 1127. However, the Court rejected that contention because of the
distinctive circumstances of Bowen and because Bowen did not involve any kind of
contract. Id.
Consolidated Edison also does not speak of any effort to limit Bowen. See Appx12.
In that case, the plaintiff filed suit in district court to challenge the constitutionality of
the Energy Policy Act of 1992 and an injunction against payments that were required
to be made by nuclear utilities to the Government pursuant to the statute. Consol.
Edison Co. of New York v. Dep’t of Energy, 247 F.3d 1378, 1381 (Fed. Cir. 2001). The
district court case came after several losses by other nuclear utilities seeking refunds of
the payments in the Court of Federal Claims as illegal exactions. Id.
Similar to Suburban Mortgage, the district court denied the Government’s motion
to dismiss or transfer based on Bowen. Id. at 1382. But on appeal, this Court rejected
the district court’s conclusion that the Court of Federal Claims could not offer an
adequate remedy. Id. The Court pointed out the specific set of circumstances in
Bowen that made a “naked money judgment” inadequate in that case but that did not
exist between the Government and the nuclear utilities, given that the situation
41
presented, at base, an illegal exaction claim. Id. at 1383-84.
Therefore, the trial court’s analysis here was misplaced. The portions of
Suburban Mortgage and Consolidated Edison relied upon by the trial court were addressing
a problem that is not raised by the instant case, specifically plaintiffs that were
attempting to use Bowen to escape the Court of Federal Claims’ jurisdiction. The
Court’s statements distinguishing Bowen must be read in that context. Neither case
“narrowly interpreted” or limited Bowen to its facts. See Appx12. The trial court erred
by unduly focusing on the unique facts of Bowen, without applying its overall legal
principles, under the misperception that Bowen had been limited by this Court.
The trial court further erred when stating that “the Supreme Court appears to
have agreed with the Federal Circuit when it clarified how to apply Bowen in Maine
Community Health.” Appx13. The trial court stated that in Maine Community Health, the
Supreme Court “appeared to accept the Federal Circuit’s approach by pointing to two
grounds on which to distinguish Bowen.” Id. However, there is absolutely nothing in
Maine Community Health suggesting that the Supreme Court believed that it was
following any “approach” of this Court or even limiting Bowen in some manner.
Rather, the Supreme Court merely considered whether Bowen and the APA
provided an alternate avenue for the insurance companies’ claims such that the
Tucker Act would not apply. See Me. Cmty. Health, 590 U.S. at 328. The Supreme
Court concluded that Bowen dealt with a different type of situation – an “injunction to
42
correct the method of calculating payments going forward” and not a claim for “past-
due sums.” Id. Therefore, the insurance companies brought valid Tucker Act claims
pursuant to a money-mandating statute. Id.
Of course, the facts of the instant case are not identical to Bowen. The instant
case does not involve a program as large and complex as Medicaid or a “dispute
between two sovereigns.” See Suburban Mortgage, 480 F.3d at 1127. Plaintiffs-appellees
were also extremely careful to not openly request any form of injunctive or
declaratory relief, but to frame their complaint as a plea for a one-time payment of
retrospective damages. However, between the two waivers of sovereign immunity,
the APA and the Tucker Act, Bowen demonstrates why plaintiffs-appellees’ theory of
recovery is dissimilar to a genuine Tucker Act claim: plaintiffs-appellees seek to obtain
money by having a court enforce the statutory mandate for SBA to award grants in
the order that applications were received.
C. The Trial Court Failed to Properly Apply Katz
This Court’s ruling in Katz also confirms that the trial court does not possess
subject-matter jurisdiction over this matter. In that case, Mr. Katz, a private
developer, challenged the Government’s interpretation of HUD regulations that were
used to calculate rent that would be paid to his company pursuant to a contract with a
public housing agency. Katz, 16 F.3d at 1207. Mr. Katz brought suit in district court,
but the district court agreed with HUD that the case belonged in the Court of Federal
43
Claims because it involved a Government contract. Id.
However, this Court reversed and held that, as in Bowen, Mr. Katz’s company
“seeks payments to which it alleges it is entitled pursuant to federal statute and
regulations; it does not seek money as compensation for a loss suffered.” Id. at 1208.
Mr. Katz sought to “compel HUD to perform the calculation of contract rents” in
accordance with its regulations. Id. “That a payment of money may flow from a
decision that HUD has erroneously interpreted or applied its regulation does not
change the nature of the case.” Id. Furthermore, because Mr. Katz sought an
adjudication of the lawfulness of HUD’s regulatory interpretation, this was
prospective relief that would have a future impact on the ongoing relationship
between the parties. Id. at 1209. Therefore, “no relief is available in the Court of
Federal Claims here because the case challenges the interpretation of law which
controls payment to [Mr. Katz’s company].” Id.
Here, the trial court made the same error.9 The trial court seemed to find
dispositive plaintiffs-appellees’ own characterization of their damages as retrospective
when it distinguished Katz. Appx13-14. Yet Katz specifically warns that regardless of
the characterization of the case by plaintiffs, the Court must “look to the true nature
9
Notably, in Katz, this Court applied Bowen to a situation that did not involve any
of Bowen’s distinctive circumstances. Neither Suburban Mortgage nor Consolidated Edison
suggested that Katz should be called into question or overruled on this basis. This is
further support that Suburban Mortgage and Consolidated Edison did not limit Bowen as the
trial court believed.
44
of the action in determining the existence or not of jurisdiction.” Katz, 16 F.3d at
1207 (citing Livingston v. Derwinski, 959 F.2d 224, 225 (Fed. Cir. 1992)). The trial court
failed to perceive that plaintiffs-appellees do not seek money damages for a past injury
or labor because nothing is currently due and owing to them.
Plaintiffs-appellees instead seek to create a new relationship with SBA
prospectively and outside of the RRF program’s limitations. The trial court’s ruling
would require SBA to put all applicants in a new, “corrected” order based on time of
application submission. Once this is done, SBA will need to review a large subset of
all applications to figure out which entities “should have” received grants and thus at
what point the $28.6 billion would have been expended in this counterfactual
scenario. The trial court’s decision requires SBA to redo or recreate the RRF
program, which essentially concluded its mission in May to June of 2021, by starting
over with a new list of eligible awardees. Plaintiffs-appellees seek a payment of
money that would flow from a determination that SBA misinterpreted section
9009c(c)(1) and awarded grants in the “wrong” order.
D. The Trial Court Erroneously Opined That It Shares Jurisdiction
With the District Courts Over This Case
As part of its analysis of the “scope” of plaintiffs-appellees’ claims, the trial
court reached the surprising conclusion that this case “is simply an instance of
concurrent jurisdiction” with the district courts. Appx14. According to the trial
court, it “often considers under the Tucker Act claims over which district courts may
45
have concurrent jurisdiction.” Id. Furthermore, the trial court asserted that its judges
“routinely review the way federal agencies administer and apply statutes and
regulations in a wide variety of contexts.” Id.
These statements are inaccurate. The cases cited by the trial court are
inapposite and irrelevant. Broughton Lumber Co. only noted that district court
jurisdiction may be concurrent with that of the Court of Federal Claims in some
specialized instances, but did not hold that the Court of Federal Claims routinely
shares district court jurisdiction. See Appx14 (citing 939 F.2d 1547, 1551, 1551 n.2
(Fed. Cir. 1991)). The other cases cited by the trial court similarly addressed statutes
that grant the district courts jurisdiction over types of claims that would normally go
to the Court of Federal Claims, such as tax refunds. Furthermore, the trial court most
certainly does not possess jurisdiction over APA claims. See, e.g., Martinez, 333 F.3d at
1313.
None of these cases suggest that the Court of Federal Claims has been
empowered to share jurisdiction with the district courts to review the administration
of Federal programs. We do not dispute that the Court of Federal Claims may
interpret the meaning of a statute or regulation and that the need for such
interpretation does not convert a Tucker Act claim into an APA claim. See Portland
Mint v. United States, 102 F.4th 1371, 1381 n.6 (Fed. Cir. 2024). But the key
prerequisite is that the Court of Federal Claims must possess jurisdiction in the first
46
place, either pursuant to the Constitution, a money-mandating statute or regulation,
an express or implied Government contract, an illegal exaction, or a bid protest.
However, the trial court appeared to believe that it possesses jurisdiction to ferret out
and award damages for a violation of any kind of “statutory command,” tying in with
its determination that section 9009c(c)(1) created an “individual right” for eligible
entities to receive awards in a first-come, first-served manner. See Appx14, Appx19.
This conception of Tucker Act jurisdiction erroneously expands into the territory of
the district courts and does not find any support in the law.
E. The Trial Court Erroneously Found the Potential Unavailability of
Relief in Another Forum to be Relevant to its Jurisdiction
In considering whether plaintiffs-appellees’ claims fell “more neatly under the
Tucker Act than they do under the APA,” the trial court found it relevant that “relief
has not been available under the APA to claimants seeking RRF grants.” Appx11.
The trial court pointed to district court cases finding equitable relief to be unavailable
due to mootness and stated that in the absence of available APA remedies, the Tucker
Act would provide “likely the only available remedy” for plaintiffs-appellees’ claims.
Id.
However, the trial court erred because a lack of available remedy elsewhere is
not determinative of Tucker Act jurisdiction. There is no basis in the law for
providing plaintiffs-appellees with an avenue to seek money damages simply because
they may not be able to obtain equitable relief now that the RRF program is over.
47
This holding would make the trial court a backup forum for litigants to repackage and
reassert non-redressable or defective APA claims. The trial court drastically
misunderstood the boundary and equilibrium between itself and the district courts.
V. In the Alternative, the Trial Court Erred in Holding that Plaintiffs-
Appellees State a Claim Upon Which Relief Can Be Granted
In the alternative, if this Court finds section 9009c to be money-mandating, the
decision of the trial court must still be reversed because the trial court erred in holding
that plaintiffs-appellees state a claim upon which relief can be granted. Any obligation
or liability under the RRF program was capped at $28.6 billion. This money has
already been expended and Congress has demonstrated its intent that no further
money should be spent by defunding the RRF program.
A. 15 U.S.C. § 9009c(b)(2)(A) Imposes a Statutory Cap On the
Amount That Congress Intended To Spend For the RRF Program
If section 9009c can be read as money-mandating, the trial court erred by
failing to recognize that section 9009c(b)(2)(A) contains a cap on that obligation.
Section 9009c(b)(2)(A) states, “[i]n addition to amounts otherwise available, there is
appropriated to the Restaurant Revitalization Fund for fiscal year 2021, out of any
money in the Treasury not otherwise appropriated, $28,600,000,000, to remain
available until expended.” 15 U.S.C. § 9009c(b)(2)(A). The inclusion of a specific
amount, $28.6 billion, creates a clear limit on the amount to be expended.
The Supreme Court in Maine Community Health explained how Congress can
48
limit its obligations. The Supreme Court held the Risk Corridors statute contained an
unlimited obligation to pay insurers for losses. Me. Cmty. Health, 590 U.S. at 313-14.
However, as contrast, the Supreme Court noted that “Congress could have expressly
limited an obligation to available appropriations or specific dollar amounts.” Id. at
313.
In a footnote, the Supreme Court then cited numerous provisions of the ACA
and other statutes that contained the “limiting language” of the phrase “subject to the
availability of appropriations” or listed an appropriated amount, such as “[t]here is
authorized to be appropriated to carry out this section, $10,000,000[.]” Id. at 313 n.7
(emphasis added). As is the case for the RRF program, “Congress has also been
explicit when it has capped payments, often setting a dollar amount or designating a specific
fund from which the Government shall pay.” Id. (emphasis added). Therefore, the
specific amount of $28.6 billion in section 9009c(b)(2)(A) is express “payment-
capping language.” See id. at 314.
Given that the Maine Community Health decision treated the wording “subject to
the availability of appropriations” as having the same limiting effect as listing a dollar
amount, the result here should be the same as this Court’s decision in Greenlee County.
In that case, despite finding the PILT Act to be money-mandating, the Court held
that the plaintiff failed to state a claim because Congress had limited the
Government’s liability with the phrase “[a]mounts are available only as provided in
49
appropriations laws.” 487 F.3d at 877. This language was equivalent to stating that
amounts are “subject to the availability of appropriations.”10 Id. Again, listing a
specific amount serves the same function and limited the Government’s liability here
to the $28.6 billion.
B. The Trial Court Misinterpreted Section 9009c(b)(2)(A) to Be
Open-Ended and Uncapped
Despite this clear case law, the trial court found this simple statutory provision
to be “unusual” and “ambiguous.” See Appx29-30. The trial court erroneously
focused on the words “in addition to amounts otherwise available,” finding that this
phrase made section 9009c(b)(2)(A) “open-ended” and “allowed an unspecified
amount of money to be used for the RRF.” Appx29-31. According to the trial court,
Congress did not intend to limit the Government’s liability to the specific $28.6 billion
appropriation because it also allowed “other, unspecified, additional amounts to be
used.” Appx31. Yet, similar to its hedging on the money-mandating issue, the trial
court also cautioned that the Government’s liability was not “completely uncapped”
because it “only requires expenditure of funds in the RRF,” and so “any claim for
damages must be limited to a claim that a plaintiff was entitled to receive funds that
were at one point in the RRF but were misspent . . . .” Appx32.
10
The Court confirmed in Prairie County, another PILT case, that in the absence of
a contract with a plaintiff, such language limits the Government’s payment obligations
to the amounts appropriated. 782 F.3d at 690.
50
The trial court’s error was based on its misinterpretation of the words
“otherwise available” as obviating the $28.6 billion limit. But the word “otherwise”
generally connotes a different situation or a different set of circumstances that is not
the same as the present. See Otherwise, Merriam-Webster, https://www.merriam-
webster.com/dictionary/otherwise (last visited February 24, 2025). The correct
reading of section 9009c(b)(2)(A) is that Congress left open the possibility that
additional amounts of money for further RRF grants could be made available but that
this did not occur.11 Neither the trial court nor plaintiffs-appellants ever identified any
such funds. The statute is thus not open-ended as to the Government’s liability
because Congress chose not to make any funds available beyond the original $28.6
billion appropriation.
C. The Trial Court Ignored That Congress’ Subsequent Actions
Eliminated Any Payment Obligation
Although the trial court requested the parties’ position on the effect of the
expiration of the statutory “covered period” and the Fiscal Responsibility Act’s
recission provision in its order for supplemental briefing, Appx27, the trial court’s
analysis ignored these issues. Assuming arguendo that section 9009c is money-
mandating, the trial court still failed to perceive that even if the Government’s liability
11
Section 9009c(b)(2)(A) also states that the $28.6 billion will “remain available
until expended,” which implies that after the expenditure occurs there is no further
money available. 15 U.S.C. § 9009c(b)(2)(A); cf. Star-Glo Assocs., LP v. United States,
414 F.3d 1349, 1355 (Fed. Cir. 2005).
51
was open-ended or uncapped when section 9009c went into effect, Congress
subsequently eliminated any payment obligation under this statue.
The Fiscal Responsibility Act became law on June 3, 2023 and permanently
rescinded unobligated funds from at least eighty-one different Federal programs,
including the RRF. See Pub. L. No. 118-5, 137 Stat. at 28. “Generally, Congress is
not bound by earlier legislation; it remains free to modify earlier statutes.” Ind. Mun.
Power Agency v. United States, 154 Fed. Cl. 752, 765 (2021), aff’d 59 F.4th 1382 (Fed. Cir.
2023) (citing Dorsey v. United States, 567 U.S. 260, 274 (2012)). The Supreme Court
affirmed in Maine Community Health that a later Congress can alter, amend, modify, or
cancel its previous obligations through further legislation. Me. Cmty. Health, 590 U.S.
at 318-19 (discussing United States v. Mitchell, 109 U.S. 146, 150 (1883) and United States
v. Fisher, 109 U.S. 143, 145-146 (1883)). When Congress reforms a payment formula
in a manner “irreconcilable” with the original method, the later expression of
Congress controls. Id.; Ind. Mun. Power Agency, 154 Fed. Cl. at 765. By permanently
rescinding any unobligated balances in the RRF, Congress plainly intended to
eliminate any obligation created by the RRF program.
Similarly, the trial court failed to consider the requirement for grant recipients
to return any funds to the Treasury that were not used on or before the last day of the
“covered period.” See 15 U.S.C. § 9009c(c)(6). There is no way for plaintiffs-
appellees to use any money on any allowable expenses by March 11, 2023, even if
52
those expenses were incurred during the covered period. Section 9009c(c)(6)
represents Congress’ intent for the RRF program to end and all funds to be spent by
awardees not later than March 11, 2023, or be forfeited.
D. The Trial Court Erred by Determining That Even if the
Government’s Liability Was Capped, Plaintiffs-Appellees Would
Still State a Claim
The trial court determined that even if there was a cap on the Government’s
liability, plaintiffs-appellees could still state a claim that SBA failed to pay them funds
that they should have received had SBA not “misinterpreted the statute and made
award to the wrong applicants, contrary to Congress’s express command in section
9009c(c)(1).” Appx32. The trial court expressed that it sought to effectuate
Congress’ intent that plaintiffs-appellees be compensated for their pandemic-related
losses. Id.
The problem with the trial court’s analysis is that it is inextricably bound to its
jurisdictional errors. SBA awarded grants based on its interpretation of section
9009c(c)(1) and its belief that the actual awardees met the statutory eligibility
requirements. The trial court does not possess jurisdiction to determine that SBA
arbitrarily and capriciously “misspent” some portion of the $28.6 billion on “improper
payments” or awarded grants to the “wrong entities” based on a misinterpretation of
section 9009c(c)(1). See id.
Plaintiffs-appellees cannot sufficiently allege that they “fall within the class as to
53
whom the statute is money-mandating” because creating this class in the first place
would require the trial court to retroactively declare that SBA wasted money on
“undeserving applicants” that might have gone to plaintiffs-appellants. See Appx32,
Appx22 (citing Fisher v. United States, 402 F.3d 1167, 1175 (Fed. Cir. 2005)). Instead,
plaintiffs-appellees should have invoked the equitable powers of the district courts to
challenge SBA’s disbursements while there was still funding available, like the Vitolo
plaintiffs who asserted that the priority period was unconstitutional. If the trial
court’s reasoning as to why plaintiffs-appellees state a claim is allowed to stand, it
would necessarily expand the trial court’s jurisdiction in novel and unforeseen ways.
CONCLUSION
For these reasons, we respectfully request that this Court reverse the trial
court’s holding that 15 U.S.C. § 9009c is money-mandating and reverse the trial
court’s holding that plaintiffs-appellees’ complaint states a claim upon which relief can
be granted.
Respectfully submitted,
YAAKOV M. ROTH
Acting Assistant Attorney General
PATRICIA M. McCARTHY
Director
/s/ William J. Grimaldi
WILLIAM J. GRIMALDI
Assistant Director
54
/s/ Rebecca S. Kruser
REBECCA S. KRUSER
Senior Trial Counsel
Commercial Litigation Branch
Civil Division, Department of Justice
P.O. Box 480, Ben Franklin Station
Washington, DC 20044
Tele: (202) 305-2035
Email: rebecca.s.kruser@usdoj.gov
March 14, 2025 Attorneys for Defendant-Appellant
55
CERTIFICATE OF COMPLIANCE
I hereby certify that this brief complies with the word limit of Federal Rule of
Appellate Procedure 5(c)(1) and Federal Circuit Rule 5 because the brief was
generated by a computer and contains 13,368 words, excluding the parts of the
motion exempted by Federal Rule of Appellate Procedure 32(f). I further certify that
this motion complies with the typeface and type-style requirements of Federal Rules
of Appellate Procedure 27(d)(1)(E), 32(a)(5), and 32(a)(6) because it has been
prepared using Microsoft Word 2013 in a proportionally spaced typeface, 14-point
Garamond font.
/s/ Rebecca S. Kruser
Rebecca S. Kruser
56
CERTIFICATE OF SERVICE
I hereby certify under penalty of perjury that on this 14th day of March, 2025, a
copy of the foregoing “BRIEF OF DEFENDANT-APPELLANT” was filed
electronically.
X This filing was served electronically to all parties by operation of the Court’s
electronic filing system.
/s/ Rebecca S. Kruser
ADDENDUM
Opinion of the United States Court of Federal Claims Case No. 23-1876
(July 24, 2024) ................................................................................................ Appx1-34
57
Case 1:23-cv-01876-RAH Document 18 Filed 07/24/24 Page 1 of 33
In the United States Court of Federal Claims
No. 23-1876C
Filed: July 24, 2024
FOR PUBLICATION
112 GENESEE STREET, LLC, et al,
Plaintiffs,
v.
UNITED STATES,
Defendant.
F. Greg Bowman, Williams & Connolly LLP, Washington, D.C., with Edward Reddington and
Robel Yared, of counsel, for the plaintiff.
Rebecca S. Kruser, Commercial Litigation Branch, Civil Division, U.S. Department of Justice,
Washington, D.C., for the defendant.
MEMORANDUM OPINION
HERTLING, Judge
In March 2021, Congress enacted the American Rescue Plan Act of 2021 (“ARPA”),
Pub. L. No. 117-2, 135 Stat. 4 (2021), which, among other things, created the Restaurant
Revitalization Fund (“RRF” or the “Fund”). The RRF was administered by the Small Business
Administration (“SBA”). The SBA was to make grants to qualifying entities from the RRF to
assist them to remedy the harms caused by the COVID-19 pandemic.
The plaintiffs are 303 restaurant, bar, and catering businesses. They have sued the United
States, acting through the SBA, claiming that they were entitled to receive grants under the RRF.
The plaintiffs seek monetary damages equal to the amounts sought in their unpaid grant
applications. They allege they are entitled to these payments because 15 U.S.C. § 9009c(c)(1)
required the SBA to “award grants to eligible entities in the order in which applications are
received by the Administrator,” but the SBA instead made payments to applicants in the order in
which it processed the applications. The plaintiffs allege that, had the SBA made the grants in
the order the applications were received, sufficient funds would have been left for them to
receive grants. The plaintiffs also base their claims in part on factual allegations of unlawful,
Appx1
Case 1:23-cv-01876-RAH Document 18 Filed 07/24/24 Page 2 of 33
negligent, and/or arbitrary and capricious acts and omissions by the SBA. 1 These actions and
omissions, the plaintiffs allege, resulted in the improper payment of grants to the awardees,
further depleting the funds that should have been used to pay grants to the plaintiffs.
The defendant has moved to dismiss under Rule 12(b)(1) of the Rules of the Court of
Federal Claims (“RCFC”). According to the defendant, the plaintiffs’ claims are beyond the
jurisdiction of the Court of Federal Claims because: (1) the plaintiffs lack standing due to a lack
of redressability for their alleged injury; (2) their claims are moot; (3) 15 U.S.C. § 9009c is not
money-mandating and cannot support a claim under the Tucker Act; and (4) the court lacks
jurisdiction over claims of arbitrary and capricious as well as negligent conduct by the SBA.
The defendant argues further that transfer to a district court would be futile because suits in
district courts seeking RRF grants under the Administrative Procedure Act (“APA”) have been
rejected. At oral argument, the Court sua sponte raised the question of whether 15 U.S.C.
§ 9009c caps the funds authorized for the RRF and, if so, whether such a cap limits the
defendant’s liability to the funds already spent, thereby preventing the plaintiffs from stating a
claim for relief under Rule 12(b)(6). The parties were directed to file supplemental briefs on that
issue.
The defendant’s motion to dismiss is denied. The plaintiffs have properly brought their
claim under the Tucker Act for damages under a money-mandating statute. The plaintiffs’
claims are not moot because the plaintiffs seek recovery from the Judgment Fund, and such
funds would redress their alleged injuries.
The plaintiffs have also successfully stated a claim. To be sure, there is caselaw
establishing that Congress can limit the government’s liability for damages under statutes that
authorize grant programs to the specific amounts set forth in those statutes. Such a cap is not
present here because, although 15 U.S.C. § 9009c only requires using money in the RRF to
award grants, it does not cap the defendant’s liability as to the plaintiffs’ claims that the
defendant awarded grants in a manner that was contrary to the express command of the statute.
Even if the defendant’s liability were capped, the relevant precedents in which a liability cap was
essential to the decision involved claims in which the plaintiffs sought the difference between the
amounts authorized under the statutes creating the grant programs and the amount of money
Congress had therefore appropriated. The plaintiffs, in contrast, are seeking damages because
they allege the SBA violated Congress’ express directive by using funds that should have been
paid to the plaintiffs instead to make awards to the wrong applicants. The plaintiffs’ claims are
of a different nature than the claims rejected in prior cases on which the defendant relies in
seeking dismissal and are sui generis. Without applicable precedent foreclosing them, the
plaintiffs’ claims may proceed on the merits.
1
Although the plaintiffs collectively only bring one cause of action, contained within that
action are 303 distinct claims, one for each plaintiff. This opinion, therefore, refers
interchangeably to the plaintiffs’ claim or claims.
2
Appx2
Case 1:23-cv-01876-RAH Document 18 Filed 07/24/24 Page 3 of 33
I. BACKGROUND
A. Factual and Legal Background
On March 11, 2021, Congress created the RRF pursuant to section 5003 of ARPA, later
codified as 15 U.S.C. § 9009c, to compensate “eligible entities” for “pandemic-related revenue
loss” caused by the COVID-19 pandemic according to a formula provided in the statute.
15 U.S.C. § 9009c(a)(4), (7). Eligible entities were broadly defined:
The term “eligible entity” —
(A) means a restaurant, food stand, food truck, food cart, caterer,
saloon, inn, tavern, bar, lounge, brewpub, tasting room, taproom,
licensed facility or premise of a beverage alcohol producer where
the public may taste, sample, or purchase products, or other similar
place of business in which the public or patrons assemble for the
primary purpose of being served food or drink;
(B) includes an entity described in subparagraph (A) that is located
in an airport terminal or that is a Tribally-owned concern; and
(C) does not include—
(i) an entity described in subparagraph (A) that—
(I) is a State or local government-operated business;
(II) as of March 13, 2020, owns or operates (together
with any affiliated business) more than 20 locations,
regardless of whether those locations do business
under the same or multiple names; or
(III) has a pending application for or has received a
grant under section 9009a of this title; or
(ii) a publicly-traded company.
Id. § 9009c(a)(4).
The definition of the term “pandemic-related revenue loss” varies based on when an
eligible entity initially opened and whether it was continuously in operation in 2019. For entities
that were open and operating for the entirety of 2019, “pandemic-related revenue loss” was
defined as an entity’s 2020 gross receipts subtracted from its 2019 gross receipts. Id.
§ 9009c(a)(7). For other entities, section 9009c(a)(7) provided different formulas to define
“pandemic-related revenue loss,” but also alternatively included in the definition “an amount
based on a formula determined by the Administrator” for each different defined entity.
Under the RRF, eligible entities could receive grants equal to their pandemic-related
revenue loss up to an aggregate maximum of $10 million, with no more than $5 million “per
physical location of the eligible entity.” Id. § 9009c(c)(4). The covered period for pandemic-
3
Appx3
Case 1:23-cv-01876-RAH Document 18 Filed 07/24/24 Page 4 of 33
related losses spanned February 15, 2020, through March 11, 2023. Id. § 9009c(a)(3); (ECF 1 at
¶ 27(a)).
To fund the RRF, Congress provided that “[i]n addition to amounts otherwise available,
there is appropriated to the Restaurant Revitalization Fund for fiscal year 2021, out of any money
in the Treasury not otherwise appropriated, $28,600,000,000, to remain available until
expended.” 15 U.S.C. § 9009c(b)(2)(A). This $28.6 billion was further subdivided into two pots
of money. First, $5 billion was reserved for “eligible entities with gross receipts during 2019 of
not more than $500,000.” Id. § 9009c(b)(2)(B)(i)(I). Second, $23.6 billion “shall be available to
the Administrator to award grants under subsection (c) in an equitable manner to eligible entities
of different sizes based on annual gross receipts.” Id. § 9009c(b)(2)(B)(i)(II). For this larger pot
of money, the Administrator was authorized to “make adjustments as necessary to the
distribution of [these] funds . . . based on demand and the relative local costs in the markets in
which eligible entities operate.” Id. § 9009c(b)(2)(B)(ii).
This division into two separate pots of money lasted for “60 days after March 11, 2021,”
that is until May 10, 2021, “or another period of time determined by the Administrator,” after
which “the Administrator may make grants using amounts appropriated under subparagraph (A)
to any eligible entity regardless of the annual gross receipts of the eligible entity.” Id.
§ 9009c(b)(2)(C). The plaintiffs have pleaded “[o]n information and belief,” that the
Administrator did not extend this timeframe past May 10, 2021, meaning that any unobligated
funds were freely available for award to any eligible entity after that date. (ECF 1 at ¶ 28(c).)
Section 9009c limited how eligible entities could use the grants funds they received, but
these limits were minimal. Grant awardees could “use the grant funds for the following expenses
incurred as a direct result of, or during, the COVID-19 pandemic,” including: “[p]ayroll costs,”
mortgage payments, “[r]ent payments” (except for prepayment of rent), “[u]tilities,”
“[m]aintenance expenses,” “[s]upplies,” normal “[f]ood and beverage expenses,” “[c]overed
supplier costs,” “[o]perational expenses,” “[p]aid sick leave,” and “[a]ny other expenses that the
Administrator determines to be essential to maintaining the eligible entity.” 15 U.S.C.
§ 9009c(c)(5).
Any eligible entity that “receive[d] a grant” and “fail[ed] to use all grant funds or
permanently cease[d] operations on or before the last day of the covered period,” was required to
“return to the Treasury any funds that the eligible entity did not use for the allowable expenses
. . . .” Id. § 9009c(c)(6). Because the covered period ran through March 11, 2023, any unused
grant awards as of March 12, 2023, had to be returned to the Treasury.
To receive an award, eligible entities had to submit applications to the SBA certifying
their need for the grant money and that they had not already received a grant under the Shuttered
Venue Operators Grant program, 15 U.S.C. § 9009a. Id. § 9009c(c)(2)(A)(ii).
All applications were subjected to a two-step review process by the SBA. This process
included a tax verification and then either an automatic or manual SBA review, including
resolution of any issues or discrepancies. (ECF 1 at ¶ 44.) A manual review could take 10 to 14
days or longer, while an automatic review took “no more than approximately 48 hours.” (Id.
4
Appx4
Case 1:23-cv-01876-RAH Document 18 Filed 07/24/24 Page 5 of 33
¶ 46(a)-(b).) “The review process did not include any mechanism for reserving funds for
applications in the order they were received. It also did not include a check before awarding a
grant to determine the order in which the application under consideration was received.” (Id.
¶ 46(c).)
The SBA processed applications in three different sets: first a trial set, second the set of
applicants prioritized by the statute, and, finally, all other applicants.
The trial group was processed “[b]etween April 25, 2021[,] and May 2, 2021.” (Id.
¶ 53.) The trial group consisted of “approximately 2,600 potential applicants randomly selected
from existing [Paycheck Protection Program] participants in the restaurant industry [who] were
permitted to submit applications through the online portal to test its operation.” (Id.)
After the trial set, on May 3, 2021, the SBA began accepting applications through an
online portal, a telephone call center, and five electronic systems. (Id. ¶¶ 29(b), 37-39.) As of
that day, the SBA accepted applications from applicants in both priority and non-priority groups.
(Id. ¶¶ 4, 51(a) (The “SBA repeatedly encouraged businesses to submit applications on May 3,
2021, when the online portal opened.”), 54.)
Regarding the priority applicants, section 9009c established a 21-day window in which
applications from women-owned, veteran-owned, and socially and economically disadvantaged
small business concerns received priority consideration. 15 U.S.C. § 9009c(c)(3)(A). 2 That 21-
day period ran from May 3, 2021, to May 23, 2021. (ECF 1 at ¶ 29(b)). After May 11, 2021, the
Administrator was permitted, but not required, to “make grants using amounts appropriated
under subparagraph (A) to any eligible entity regardless of the annual gross receipts of the
eligible entity.” 15 U.S.C. § 9009c(b)(2)(C); (see also ECF 1 at ¶¶ 28(c), 49(d), 55.) 3
As for all other applicants, the SBA did not begin processing their applications on May
24, 2021, the first day after the end of the priority period. Instead, the “SBA has represented”
that on May 25, 2021, two days after the expiration of the priority application period, it “began
2
On May 27, 2021, the Sixth Circuit issued a preliminary injunction ordering the SBA to
fund an applicant’s “grant application, if approved, before all later-filed applications, without
regard to processing time or the applicants’ race or sex.” Vitolo v. Guzman, 999 F.3d 353, 365
(6th Cir. 2021). In so doing, the Sixth Circuit held that, except for the preference for veteran-
owned applicants, the priority provisions likely violated the equal protection component of the
due process clause to the extent they prioritized grant award to businesses based on the sex or
race of their owners. Id. at 360-66.
3
After the priority period ended on May 23, 2021, the “SBA decided . . . it would cease
processing applications received from [p]riority [a]pplicants, process only non-priority
applications SBA had received, award grants only to non-priority applicants, use remaining RRF
funding only for grants awarded to non-priority applicants, and disburse no further awards to
[p]riority [a]pplicants.” (ECF 1 at ¶ 59.)
5
Appx5
Case 1:23-cv-01876-RAH Document 18 Filed 07/24/24 Page 6 of 33
processing non-priority applications with FY 2019 gross revenues less than $500,000 . . . .”
(ECF 1 at ¶ 62.) It was not until May 27, 2021, that the SBA finished making awards to priority
applicants and began processing and making awards to other non-priority applications. (Id.
¶¶ 62, 64, 65). Notably, on May 24, 2021, the SBA stopped accepting RRF applications due to
“overwhelming demand.” Kingsley Restaurants, Inc. v. United States Small Bus. Admin., No.
1:21-CV-2314-SCJ, 2021 WL 8441778, at *1 (N.D. Ga. Aug. 24, 2021). 4 “[C]laims on the RRF
rapidly dwarfed the allocation of funds set aside by Congress.” Id.
When making awards, section 9009c required that, except for the priority applicants
during the 21-day priority period and the division of the RRF into the two pots of money based
on gross revenues through May 10, 2021, “the Administrator shall award grants to eligible
entities in the order in which applications are received by the Administrator.” 15 U.S.C.
§ 9009c(c)(1). The plaintiffs allege that despite this express requirement, the SBA decided to
issue awards in the order in which applications were processed, not the order in which they were
received. (ECF 1 at ¶ 8.) Even though the plaintiffs’ well-pleaded allegations are taken to be
true in resolving a motion to dismiss, the defendant notably has not denied that the SBA
proceeded in the manner alleged by the plaintiffs.
The plaintiffs each submitted its application to the SBA for RRF grant awards on May 3,
2021. (Id. ¶ 13.) Despite applying on the first possible day, none of the plaintiffs was ever
awarded a grant from the RRF, even though other non-priority applicants that filed their
applications later received grants. (See id. ¶¶ 5, 9, 138.) The plaintiffs contend that they should
have been awarded grants but were not because the SBA unlawfully did not award grants in the
order that applications were received. (Id. ¶¶ 5, 75.) Instead, the “SBA awarded RRF grants in
the order applications were processed. Because the time required to process applications varied
greatly, the order in which SBA awarded grants differed significantly from the order in which
applications were received.” (Id. ¶ 47.) While the SBA awarded grants in the order in which
applications were processed (id. ¶ 8), and although the complaint notes the SBA “claims to have
initiated processing of applications in the order they were received” (id. ¶ 54(b) (emphasis
added)), it is nevertheless unclear from the complaint and the parties’ briefs how and in what
order the SBA decided to process the non-priority applications.
On or about June 30, 2021, the SBA stopped processing RRF applications. (Id. ¶ 67.)
By that point, the SBA had awarded approximately $28 billion in RRF grants. (Id. ¶ 75.) In
“June 2022, approximately $180 million of RRF funding remained without recorded obligations,
including $24 million set aside for litigation.” (Id. ¶ 68.) “After November 2022, SBA awarded
approximately $83 million in additional grants to businesses whose applications had been fully
processed as of June 30, 2021.” (Id. ¶ 69.) These funds were at least partially “from recoveries
of misallocated grants or return of unused grants.” (Id.) This set of RRF grant awards was
allegedly issued in the order in which the applications had been received, after the Department of
4
Although the date the SBA stopped accepting applications is not noted in the complaint, the
plaintiffs tacitly agree with the defendant that no new applications were accepted after May 24,
2021. (See ECF 8 at 40 (citing ECF 7 at 2 n.3).)
6
Appx6
Case 1:23-cv-01876-RAH Document 18 Filed 07/24/24 Page 7 of 33
Justice advised the SBA on “how to comply with statutory requirements and court rulings.” (Id.
¶ 69(a)-(b).)
On June 3, 2023, the Fiscal Responsibility Act, Pub. L. 118-5, 137 Stat. 10, became law.
Division B, Title I, Section 52 of that act provided that “[t]he unobligated balances of amounts
made available by section 5003(b)(2)(A) of Public Law 117-2,” that is 15 U.S.C. §
9009c(b)(2)(A), “are hereby permanently rescinded.” Notwithstanding this law, the plaintiffs
allege “[o]n information and belief, available RRF funding will increase in fiscal year 2024 as a
result of SBA’s mandatory required audit and recovery efforts that will be ongoing through at
least July 2024.” (ECF 1 at ¶ 70.)
B. Procedural History
On October 25, 2023, the plaintiffs filed their complaint. (ECF 1.) On February 26,
2024, the defendant moved to dismiss pursuant to RCFC 12(b)(1). (ECF 7.) The plaintiffs
responded on March 25, 2024 (ECF 8), and the defendant replied on April 22, 2024 (ECF 10).
Oral argument was heard on May 22, 2024. During oral argument, the Court raised the question
of whether 15 U.S.C. § 9009c(b)(2)(A) included a cap on the defendant’s liability that may
preclude the plaintiffs from stating a claim. The Court ordered supplemental briefing to address
this issue. (ECF 13.) Each side filed its supplemental brief on June 5, 2024. (ECF 16-17.)
II. JURISDICTION AND STANDARDS OF REVIEW
The Tucker Act, 28 U.S.C. § 1491(a), vests in the Court of Federal Claims jurisdiction
over claims for money damages against the United States:
The United States Court of Federal Claims shall have jurisdiction to
render judgment upon any claim against the United States founded
either upon the Constitution, or any Act of Congress or any
regulation of an executive department, or upon any express or
implied contract with the United States, or for liquidated or
unliquidated damages in cases not sounding in tort.
The Tucker Act itself does not “create[ ] a substantive right enforceable against the
Government by a claim for money damages.” United States v. White Mountain Apache Tribe,
537 U.S. 465, 472 (2003). To bring a claim within the Court of Federal Claim’s limited
jurisdiction, a plaintiff must allege a violation of a statutory, regulatory, or constitutional
provision which is money-mandating, meaning the provision “‘can fairly be interpreted as
mandating compensation by the Federal Government for the damage sustained.’” United States
v. Testan, 424 U.S. 392, 400 (1976) (quoting Eastport S.S. Corp. v. United States, 372 F.2d
1002, 1009 (Ct. Cl. 1967)).
The defendant has moved to dismiss the complaint for lack of subject-matter jurisdiction
under RCFC 12(b)(1). In considering a motion under RCFC 12(b)(1), a “court must accept as
true all undisputed facts asserted in the plaintiff’s complaint and draw all reasonable inferences
in favor of the plaintiff.” Trusted Integration, Inc. v. United States, 659 F.3d 1159, 1163 (Fed.
7
Appx7
Case 1:23-cv-01876-RAH Document 18 Filed 07/24/24 Page 8 of 33
Cir. 2011). When a plaintiff’s asserted jurisdictional facts are disputed, however, only the
plaintiff’s uncontroverted factual allegations are accepted as true. Shoshone Indian Tribe of
Wind River Rsrv., Wyo. v. United States, 672 F.3d 1021, 1030 (Fed. Cir. 2012). A court is not
“‘restricted to the face of the pleadings’” in resolving disputed jurisdictional facts and may
review evidence outside the pleadings. Id. (quoting Cedars-Sinai Med. Ctr. v. Watkins, 11 F.3d
1573, 1584 (Fed. Cir. 1993), cert. denied, 512 U.S. 1235 (1994)). Accordingly, a court may
consider in resolving a motion to dismiss for lack of jurisdiction information provided by the
defendant contrary to the allegations in the complaint.
The plaintiffs have the burden of establishing jurisdiction by a preponderance of the
evidence. Trusted Integration, Inc, 659 F.3d at 1163. If a court finds that the plaintiffs have not
met their burden to establish subject-matter jurisdiction over a claim, RCFC 12(h)(3) requires
dismissal of that claim.
As permitted by Federal Circuit precedent, the Court sua sponte raised the question of
whether the plaintiffs’ complaint must be dismissed for failure to state a claim under
RCFC 12(b)(6). See Anaheim Gardens v. United States, 444 F.3d 1309, 1315 (Fed. Cir. 2006)
(“The trial court may dismiss sua sponte under Rule 12(b)(6), provided that the pleadings
sufficiently evince a basis for that action.”). Dismissal for failure to state a claim upon which
relief can be granted “is appropriate when the facts asserted by the claimant do not entitle him to
a legal remedy.” Lindsay v. United States, 295 F.3d 1252, 1257 (Fed. Cir. 2002). In considering
dismissal under RCFC 12(b)(6), a court must both accept as true a complaint’s well-pleaded
factual allegations, Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009), and draw all reasonable
inferences in favor of the non-moving party. Sommers Oil Co. v. United States, 241 F.3d 1375,
1378 (Fed. Cir. 2001). To avoid dismissal, a complaint must allege facts “plausibly suggesting
(not merely consistent with)” a showing that the plaintiffs are entitled to the relief sought. Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 557 (2007). “The plausibility standard is not akin to a
‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted
unlawfully.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 556).
III. DISCUSSION
A. The Parties’ Arguments
The defendant raises four arguments in its motion to dismiss for lack of subject-matter
jurisdiction.
First, it argues the plaintiffs lack standing because their claims are not redressable.
Specifically, the defendant argues that because the amount of funding set by Congress has been
expended, no money remains in the RRF to pay for any grants; the plaintiffs’ injuries, if any,
therefore cannot be redressed. (ECF 7 at 14-16.)
Second, the defendant argues that the plaintiffs’ claims are moot for two reasons: (1) the
covered period for RRF grants has expired, meaning any unused grants would have to be
returned to the Treasury as required by section 9009c(c)(6); and (2) Section 52 of Division B,
8
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Case 1:23-cv-01876-RAH Document 18 Filed 07/24/24 Page 9 of 33
Title I of the Fiscal Responsibility Act “permanently rescinded” any “unobligated balances of
amounts made available by section [9009c](b)(2)(A).” (Id. at 16-19.)
Third, the defendant contends that section 9009c is not money-mandating because it does
not require awarding a grant to any applicant. (Id. at 19-22.) The defendant argues that section
9009c(c)(1) does not confer a substantive right to money because it “only speaks to the method
of application administration and processing of award disbursements.” (Id. at 20.) As for
section 9009c(b)(3), while it requires the money to be used by the administrator, it is not money-
mandating because it does not require payment to any specific applicant. (Id. at 21-22.)
Finally, the defendant argues that the complaint’s references to arbitrary and capricious
acts and omissions and negligence are attempts to bring claims under the APA over which the
Court of Federal Claims lacks jurisdiction. (Id. at 22-24, 28-29.) Further, the defendant argues
that the substance of the plaintiffs’ “allegations in essence is an APA claim challenging SBA’s
decisions in administering the RRF program,” notwithstanding their claim for money damages.
(Id. at 24-27.)
The plaintiffs, naturally, disagree. They contend that they have standing because they are
not seeking equitable relief that would order the SBA to award a grant, but rather money
damages for the SBA’s failure to award grants in compliance with the law that established the
RRF. (ECF 8 at 21-23.) The availability of funds, the plaintiffs argue, is a question for the
merits, not a jurisdictional defect, because the Judgment Fund can be used to pay any award for
monetary damages. (Id. at 23 n.13, 23-27.)
Next, the plaintiffs argue their claims are not moot because section 9009c(c)(5) allows
them to use any grant money received to offset already incurred expenses that predate the receipt
of funds. Specifically, the plaintiffs point to the fact that the term “covered period” under section
9009c(c)(5) allows grant awards to be used for expenses that were incurred as early as February
15, 2020, well before any awards were made. (Id. at 27-29.) As to whether section 9009c is
money-mandating, the plaintiffs argue that 9009c(c)(1) required payment of grants to them
specifically because of the timeliness of their applications. (Id. at 18-21.) According to the
plaintiffs, the SBA lacked discretion to decide whether to award a grant based on finding an
applicant was qualified but had to award a grant to any qualified applicant in the order in which
the application was received. (Id. at 12-21.)
Lastly, the plaintiffs contend that the court has jurisdiction to review whether an agency
followed statutes and regulations and that the possibility of an overlap between the APA and the
Tucker Act does not divest the court of jurisdiction. (Id. at 34-39.) The plaintiffs further
emphasize how their claims for money damages more closely resemble the money damages
claims in Maine Community Health Options v. United States, 590 U.S. 296 (2020), than the
claim for injunctive relief in Bowen v. Massachusetts, 487 U.S. 879 (1988), and thus fall within
the jurisdiction of the Court of Federal Claims under the Tucker Act, not the district courts under
the APA. (Id. at 39-42.) The plaintiffs notably disclaim any attempt to bring APA claims and
instead explain that references in the complaint to negligence or arbitrary and capricious actions
are simply a “characterization of agency action,” not a basis for relief. (Id. at 36, 39.)
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B. Rule 12(b)(1)
1. The Scope of the Plaintiffs’ Claims
a. The Tucker Act vs. the APA
The complaint’s singular cause of action is explicitly limited to a claim for money
damages under the Tucker Act. (ECF 1 at 45.) The defendant, however, argues the court
entirely lacks jurisdiction over the complaint because in substance the plaintiffs plead a claim
under the APA for the SBA’s illegal conduct in administering the RRF and its negligence. Such
claims, the defendant asserts, fall within the jurisdiction of the district courts.
In advancing these arguments, the defendant relies heavily on Bowen and the Federal
Circuit’s opinion in Katz v. Cisneros, 16 F.3d 1204 (Fed. Cir. 1994) while attempting to
distinguish the present case from Maine Community Health. (ECF 7 at 34, 38-41.)
A court’s “jurisdiction cannot be circumvented by [ ] artful pleading and, accordingly,
[courts] customarily look to the substance of the pleadings rather than their form.” Brazos Elec.
Power Co-op., Inc. v. United States, 144 F.3d 784, 787 (Fed. Cir. 1998). “Regardless of the
characterization of the case ascribed by [a plaintiff] in its complaint, [courts] look to the true
nature of the action in determining the existence or not of jurisdiction.” Katz, 16 F.3d at 1207
(Fed. Cir. 1994).
When examining whether a claim falls under the APA or the Tucker Act, the Federal
Circuit has instructed that “[t]he analysis begins [ ] with the question raised by 5 U.S.C. § 704—
is there an ‘adequate remedy’ in a court other than the district court, that is, can the Court of
Federal Claims provide an adequate remedy under the Tucker Act for the alleged wrong.”
Suburban Mortg. Assocs., Inc. v. United States, 480 F.3d 1116, 1125 (Fed. Cir. 2007). As the
Federal Circuit explained, “[i]f the jurisdictional requirements of the Tucker Act are satisfied . . .
and if the Court of Federal Claims through a money judgment can provide an adequate remedy
under the Tucker Act, § 704 bars the district court from hearing the case because it belongs in
another court—the Court of Federal Claims.” Id. at 1125-26 (cleaned up).
There is no question that the payment of money damages to the plaintiffs, if available,
“would provide them with a complete and adequate remedy for the relief currently sought.”
ARRA Energy Co. I v. United States, 97 Fed. Cl. 12, 24 (2011) (citing Suburban Mortg.,
480 F.3d at 1126 and noting that when adequate remedies are available under the Tucker Act,
“the district courts lack jurisdiction under section 704 of the APA”); Telecare Corp. v. Leavitt,
409 F.3d 1345, 1349-50 (Fed. Cir. 2005) (cleaned up) (“The availability of an action for money
damages under the Tucker Act or Little Tucker Act is presumptively an ‘adequate remedy’ for
§ 704 purposes. Because [the plaintiff] can bring an action under the Tucker Act or Little Tucker
Act to redress the allegedly improper exaction, there is no waiver of sovereign immunity under
the APA.”).
The plaintiffs here seek only money damages (ECF 1 at 46); such damages would
adequately compensate them for the allegedly illegal failure of the SBA to award the plaintiffs
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the grants, i.e., money, which they applied for and were entitled to but did not receive. The
plaintiffs are not seeking prospective relief. Similarly, there is no request that would entangle
the court in a “complex ongoing relationship” necessitating adjudication of future disputes.
Maine Cmty. Health, 590 U.S. at 327. These factors suggest that the plaintiffs’ claims fall more
neatly under the Tucker Act than they do under the APA.
Also relevant to the analysis is the fact that relief has not been available under the APA to
claimants seeking RRF grants. Multiple district courts have found that equitable relief is
unavailable because the RRF has been depleted, and that claims under the APA are therefore
moot. Reboot Macon, LLC, v. United States, 5:21-CV-221, 2023 WL 4672395, at *3-5 (M.D.
Ga. July 20, 2023); Collins v. Small Business Admin., No. 2:22-CV-4104, 2024 WL 128201, at
*3-4 (E.D. Pa. Jan. 11, 2024); W6 Restaurant Group, Ltd, v. Guzman, No. 1:21-CV-2361, 2024
WL 1973132, at *6-10 (N.D. Ohio May 3, 2024). In the absence of available APA remedies, not
only does the Tucker Act provide an “adequate remedy,” but likely the only remedy for the
plaintiffs’ claims.
The defendant attempts to shoehorn the plaintiffs’ claims into the Bowen framework to
argue they must be raised under the APA. The plaintiff in Bowen sought “to review a final order
of the Secretary of Health and Human Services refusing to reimburse a State for a category of
expenditures under its Medicaid program.” 487 U.S. at 882. The Supreme Court held that a:
suit to enforce § 1396b(a) of the Medicaid Act, which provides that
the Secretary “shall pay” certain amounts for appropriate Medicaid
services, is not a suit seeking money in compensation for the damage
sustained by the failure of the Federal Government to pay as
mandated; rather, it is a suit seeking to enforce the statutory mandate
itself, which happens to be one for the payment of money.
Id. at 900. 5
5
The Supreme Court hinted that its holding in Bowen was not broad, noting in a footnote
immediately after the language quoted in the text that “[t]here are, of course, many statutory
actions over which the Claims Court has jurisdiction that enforce a statutory mandate for the
payment of money rather than obtain compensation for the Government’s failure to so pay. The
jurisdiction of the Claims Court, however, is not expressly limited to actions for ‘money
damages,’ whereas that term does define the limits of the exception to § 702. Moreover, such
statutes, unlike a complex scheme such as the Medicaid Act that governs a set of intricate,
ongoing relationships between the States and the Federal Government, are all statutes that
provide compensation for specific instances of past injuries or labors; suits brought under these
statutes do not require the type of injunctive and declaratory powers that the district courts can
bring to bear in suits under the Medicaid Act. Thus, to the extent that suits to enforce these
statutes can be considered suits for specific relief, suits under the Tucker Act in the Claims Court
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The Supreme Court’s holding in Bowen has been narrowly interpreted by the Federal
Circuit. In Consolidated Edison Company of New York v. U.S. Department of Energy, the
Federal Circuit explained that “[i]n Bowen, the Supreme Court linked its judgment to a specific
set of circumstances,” that were “not present in [Consolidated Edison].” 247 F.3d 1378, 1384,
cert. denied, 534 U.S. 1034 (2001). In Suburban Mortgage, the Federal Circuit expounded on
the appropriate and limited application of Bowen by focusing on the distinctive circumstances
present in that case:
These circumstances include: Bowen was a dispute between two
sovereigns—a state government and the federal government—
implicating federalism issues; the dispute centered on the
administration of a major federal grant, the Medicaid program,
involving enormous sums of money and complex interactions
between the governments and the beneficiaries; at issue were the
institutional arrangements between these two governments; the
governments were locked into a fabric of long-term administration
of the program; and the money involved in the uncovered education
services was a small fraction of the total reimbursement the state
received each year for its Medicaid costs under the program. In
addition, the Court’s focus was on the statutory requirements set
forth in this complex grant program—nowhere in Bowen did the
Court make reference to the existence of any specific contract or
express agreement defining the relationship between the parties.
Suburban Mortg., 480 F.3d at 1127. These distinctive factors of Bowen were absent from
Consolidated Edison and Suburban Mortgage; they are also absent from this case.
The effort to limit Bowen to the nature of the underlying statutory regime at issue and the
remedy sought was reinforced in Suburban Mortgage, in which the Federal Circuit identified as
the key feature of Bowen the fact that it involved “a complex, ongoing relationship between
plaintiff and the Government in which the plaintiff seeks declaratory or injunctive relief to
modify the Government’s future obligations under the program.” Suburban Mortgage, 480 F.3d
at 1127 (emphasis in original).
Because of these absent features, in Suburban Mortgage, unlike in Bowen, “a judgment
ordering prospective relief w[as] not [ ] necessary or appropriate”. Id. Thus, jurisdiction in
Suburban Mortgage was found to be appropriate in the Court of Federal Claims, not the district
court. As now-Judge Solomson observed in analyzing these precedents in his book on the
jurisdiction and procedure of the Court of Federal Claims, “[t]he bottom line is that, if a
plaintiff’s goal is to obtain a money judgment and the claim does not sound in tort, the [Court of
Federal Claims] should be considered as the putatively correct forum for the claim in the first
offer precisely the sort of ‘special and adequate review procedures’ that § 704 requires to direct
litigation away from the district courts.” Bowen, 487 U.S. at 900 n.31 (cleaned up).
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instance.” Matthew H. Solomson, Court of Federal Claims Jurisdiction, Practice, and Procedure,
29.IV.A. (2016).
Most importantly, the Supreme Court appears to have agreed with the Federal Circuit
when it clarified how to apply Bowen in Maine Community Health. In Maine Community
Health, its most recent exposition on the Tucker Act, the Supreme Court appeared to accept the
Federal Circuit’s approach by pointing to two grounds on which to distinguish Bowen.
First, the Court noted that the nature of relief sought in Bowen was not money damages
but instead “prospective declaratory and injunctive relief to clarify the extent of the
Government’s ongoing obligations under the Medicaid program.” Maine Cmty. Health, 590 U.S.
at 326-27. Similarly, the plaintiffs here are seeking “past due sums,” see id., and not injunctive,
declaratory, or other prospective relief. (ECF 1 at ¶ 153 (specifying plaintiffs have “incur[red]
monetary damages in the amount of their RRF grants”); ECF 1-2.)
Second, the Supreme Court emphasized the importance of the relationship between the
parties. According to the Supreme Court, “the Administrative Procedure Act ‘is tailored’ to
‘[m]anaging the relationships between States and the Federal Government that occur over time
and that involve constantly shifting balance sheets,’ while the Tucker Act is suited to
‘remedy[ing] particular categories of past injuries or labors for which various federal statutes
provide compensation.’” Maine Cmty. Health, 590 U.S. at 326-27 (quoting Bowen, 487 U.S. at
904-05 n.39). The plaintiffs’ claims are for a one-time grant award. They would not require any
ongoing or prospective relationship with the SBA regarding the RRF; the plaintiffs are seeking
only a one-time payment of damages for grants that they contend they are owed but did not
receive, contrary to the express requirements imposed on the SBA by Congress.
As refined and clarified by ensuing precedents from both the Supreme Court and the
Federal Circuit, Bowen does not support the defendant’s argument that the plaintiffs’ claims are
beyond the jurisdiction of the Court of Federal Claims under the Tucker Act.
The defendant’s reliance on Katz v. Cisneros is also misplaced. That case involved a
challenge by a plaintiff to a federal agency’s interpretation of its regulations related to federal
housing-support payments to local housing agencies. Katz did not involve a claim under a direct
statutory obligation between the plaintiff and a federal agency; rather, it involved a challenge to
an agency’s regulations that happened to have financial consequences for the plaintiff. 16 F.3d
at 1205-06; see also Brighton Vill. Assocs. v. United States, 52 F.3d 1056, 1059-60 (Fed. Cir.
1995) (relying on the fact that the plaintiff in Katz was not in privity with the federal
government, but rather sought to challenge an interpretation of federal regulations that would
indirectly and prospectively provide money to the plaintiff by changing how a federal agency
calculated future contract rents under a contract between the plaintiff and a local housing
agency); Boaz Hous. Auth. v. United States, 141 Fed. Cl. 74, 81 (2018) (same), aff’d, 994 F.3d
1359 (Fed. Cir. 2021). The Federal Circuit held that the claim in Katz was properly heard in
district court under the APA because the plaintiff was seeking prospective relief through an
interpretation of a federal regulation. Katz, 16 F.3d at 1208-1209. In contrast, the plaintiffs in
the present case request retrospective damages resulting from the SBA’s denial of a one-time
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payment of money directly from the federal government under a grant program administered by
the SBA. The relief sought by the plaintiffs does not require any prospective relief.
While the plaintiffs’ claim involves a challenge to the SBA’s past administration of the
RRF, this fact on its own does not convert the plaintiffs’ claim for damages into an APA claim.
“The fact that the Claims Court ha[s] to interpret the meaning of [a] regulation does not convert
[the plaintiffs’ claim] into an APA claim. The Claims Court can resolve issues, including
interpreting a government regulation.” Portland Mint v. United States, 102 F.4th 1371, 1381 n.6
(Fed. Cir. 2024) (citing Radium Mines Inc. v. United States, 153 F. Supp. 403, 405-06 (Ct. Cl.
1957)) (interpreting the word “redemption” in regulations governing the redemption of bent or
partial coins by the U.S. Mint). This recent holding by the Federal Circuit in Portland Mint is
consistent with its long-standing jurisprudence. “‘It is often necessary to interpret or apply
statutory or common law principles in order to resolve contract claims, but the fact that the
resolution of a contract claim may turn on the interpretation of a statute does not deprive the
Court of Federal Claims of jurisdiction over that claim.’” Holmes v. United States, 657 F.3d
1303, 1312 (Fed. Cir. 2011) (quoting Del–Rio Drilling Programs Inc. v. United States, 146 F.3d
1358, 1367 (Fed. Cir. 1998)).
The fact that the plaintiffs’ claims are based directly on an alleged violation of a statutory
command rather than the interpretation of a contract does not ipso facto place the claims under
the APA and outside the Tucker Act. Indeed, Maine Community Health addressed the effect of a
limitation in an appropriations rider that sought to limit the obligations authorized in the
underlying statutory scheme, a case of statutory interpretation. 590 U.S. at 314-21. Bowen and
its progeny provide the test for determining whether a claim falls under the APA, for the district
courts to resolve, or under the Tucker Act, for this court to resolve. Whether the underlying legal
issue involves the interpretation of a statute, regulation, contract, or other legal instrument is not
determinative to the outcome of that test.
Judges of this court routinely review the way federal agencies administer and apply
statutes and regulations in a wide variety of contexts. The court often considers under the
Tucker Act claims over which district courts may have concurrent jurisdiction. See Quality
Tooling, Inc. v. United States, 47 F.3d 1569, 1573 (Fed. Cir. 1995) (“There can be little doubt
that, by statute, both the District Court, sitting in bankruptcy, and the Court of Federal Claims are
empowered with subject matter jurisdiction over this contract dispute.”); Qwest Corp. v. United
States, 48 Fed. Cl. 672, 686 (2001) (“There is nothing irreconcilable between the statutes in
permitting [a plaintiff] to seek ‘just compensation’ in the Court of Federal Claims under the
Tucker Act for an alleged taking . . . even though [a plaintiff] may seek the same relief in a
federal district court under the Telecom Act.”).
This case is simply an instance of concurrent jurisdiction, which the Court of Federal
Claims already has with the district courts in several legal areas, such as claims for tax refunds,
28 U.S.C. § 1346(a)(1), and claims seeking less than $10,000, 28 U.S.C. § 1346(a)(2). This
concurrent jurisdiction can also include claims that involve questions of statutory interpretation.
See Broughton Lumber Co. v. Yeutter, 939 F.2d 1547, 1551 & n. 2 (Fed. Cir. 1991) (“agree[ing]
with th[e] principle” “that district court jurisdiction can be concurrent with that of the Claims
Court,” particularly in suits under the APA or “involve[ing] statutes with language permitting a
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Case 1:23-cv-01876-RAH Document 18 Filed 07/24/24 Page 15 of 33
party to ‘sue and be sued’ in district court.”); Brit. Airways PLC v. United States, 170 Fed. Cl.
305, 311 (2024) (noting “[i]t is well established that this jurisdictional grant extends to suits for
the refund of taxes remitted to the Treasury”; such suits often involve interpreting the Internal
Revenue Code) (citing 28 U.S.C. § 1346(a)); Prochazka v. United States, 116 Fed. Cl. 444, 451-
57 (2014) (in the context of an Equal Access to Justice Act fee petition, evaluating whether the
defendant’s interpretation of a statute was substantially justified in part by looking to a district
court’s opinion addressing the same “general issue raised in this case”). Further, the Federal
Circuit, without suggesting that such a challenge was properly raised only under the APA, has
specifically considered whether the government’s interpretation of a term in a grant-authorizing
statute was correct. Star-Glo Assocs., LP v. United States, 414 F.3d 1349, 1356-58 (Fed. Cir.
2005) (addressing the meaning of “trees per acre” in Pub. L. No. 106-387, § 810(a)).
The plaintiffs are seeking a one-time payment of a specific amount of money they
contend is due to them and are not seeking prospective relief nor are in an ongoing, long-term
relationship with the federal government. Their claim properly falls under the Tucker Act and
not the APA, provided that 15 U.S.C. § 9009c is money-mandating.
b. The Plaintiffs’ Inartful Complaint
Before addressing whether section 9009c is money-mandating, the plaintiffs’ complaint
must be addressed. On its face, the complaint is explicitly limited to a claim for money-damages
under section 9009c. (ECF 1 at ¶ 14, pg. 41, 45-46.) Nevertheless, the complaint repeatedly
alleges negligent and arbitrary or capricious conduct by the SBA. (Id. ¶¶ 80-143.) These
references have, fairly, led the defendant to question whether the plaintiffs are attempting to raise
an APA claim or, even further afield, a claim for negligence.
It is well-established that the court does not possess jurisdiction over negligence claims,
which sound in tort and are expressly excluded from Tucker Act jurisdiction, 28 U.S.C.
§ 1491(a); Keene Corp. v. United States, 508 U.S. 200, 214 (1993) (“[T]ort cases are outside the
jurisdiction of the Court of Federal Claims today . . . .”). Likewise, claims under the APA are
beyond the jurisdiction of the Court of Federal Claims. Martinez v. United States, 333 F.3d
1295, 1313 (Fed. Cir. 2003) (“[T]he Court of Federal Claims lacks APA jurisdiction . . . .”). The
plaintiffs do not dispute this settled law. Instead, they assert that they only intended their
complaint to characterize the defendant’s actions, rather than raise additional claims. (ECF 8 at
36, 39.)
The complaint is inartful, containing much superfluous and useless rhetoric to add
atmospherics to the claim. Not only does this surplusage needlessly put at risk the jurisdictional
basis for the plaintiffs’ claims, but it is ineffective.
To the extent the plaintiffs’ complaint simply includes a “characterization of agency
action,” however, that characterization is not relevant to the court’s jurisdiction. See Brazos,
144 F.3d at 787; Katz, 16 F.3d at 1207. “Of course, the party who brings a suit is master to
decide what law he will rely upon . . . .” The Fair v. Kohler Die & Specialty Co., 228 U.S. 22,
25 (1913). The complaint should not have included references to negligence or arbitrary conduct
by the SBA, but it does not explicitly state a cause of action under the APA or a negligence
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Case 1:23-cv-01876-RAH Document 18 Filed 07/24/24 Page 16 of 33
theory and does not claim to rely on the APA or another basis for asserting this court’s
jurisdiction. (ECF 1 at ¶ 14, pg. 41, 45-46.) In short, the plaintiffs are arguing that the SBA did
not have discretion to refuse to make grant awards to them under the statute, and the arbitrary
exercise of discretion that the SBA did not have does not affect the legal issue raised by the
plaintiffs.
The gravamen of the plaintiffs’ complaint is that the defendant violated a money-
mandating statute within this court’s Tucker Act jurisdiction, and not whether the defendant
committed a tort or violated the APA. Cf. Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987)
(“The [well-pleaded complaint] rule makes the plaintiff the master of the claim; he or she may
avoid” raising claims they do not wish to raise.). If on the merits the plaintiffs attempt to argue
they may recover based on the SBA’s negligent or arbitrary conduct without connecting it to a
violation of a money-mandating statute, the defendant can object to such claims as falling
outside the scope of the plaintiffs’ complaint and the court’s jurisdiction.
2. Whether Section 9009c is Money-Mandating
The plaintiffs’ claims are properly heard under the Tucker Act because they seek
monetary relief rather than prospective relief under the APA and do not sound in tort. The
question remains whether section 9009c is money-mandating such as to allow the plaintiffs the
monetary relief they seek. The two relevant provisions are: (1) subsection (b)(3)’s requirement
that “[t]he Administrator shall use amounts in the Fund to make grants described in subsection
(c),” and (2) subsection (c)(1)’s requirement that “[e]xcept as provided in subsection (b) and
paragraph (3), the Administrator shall award grants to eligible entities in the order in which
applications are received by the Administrator.” The plaintiffs rely on the “shall award”
language of section 9009c(c)(1) to support their claim that the statute is money-mandating.
The defendant acknowledges that a statue is money-mandating “when the Government
does not have any discretion to pay funds once the requirements of the statute are met.” (ECF 7
at 19 (citing Samish Indian Nation v. United States, 419 F.3d 1355, 1364 (Fed. Cir. 2005)).) The
defendant argues, however, that “nothing in [section 9009c’s] text compels SBA to pay upon
receipt of a satisfactory application.” (Id. at 21.) “If Congress had intended SBA to award
grants after the priority period to all eligible entities” or some variation thereof, “it would have
said so.” (Id. at 20.) Instead, the defendant argues that the “shall award” language of section
9009c(c)(1) “only speaks to the method of application administration and processing of award
disbursements.” (Id.) The defendant also points to section 9009c(b)(3), which provides that
“[t]he Administrator shall use amounts in the RRF to make grants described in subsection (c),” to
argue that this provision shows Congress only empowered the SBA to make awards to entities
that met the eligibility criteria; Congress did not require “SBA to specifically make payments to
any applicant.” (Id. at 21.)
“A statute is money mandating if either: (1) it can fairly be interpreted as mandating
compensation by the Federal Government for damages sustained; or (2) it grants the claimant a
right to recover damages either expressly or by implication.” Lummi Tribe of the Lummi Rsrv.,
Washington v. United States, 870 F.3d 1313, 1317 (Fed. Cir. 2017) (cleaned up). “It is enough
‘that a statute creating a Tucker Act right be reasonably amenable to the reading that it mandates
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Case 1:23-cv-01876-RAH Document 18 Filed 07/24/24 Page 17 of 33
a right of recovery in damages.’ [United States v. White Mountain Apache Tribe, 537 U.S. 465,
473 (2003)]. Further, the statute and regulations must be money-mandating as to the class of
which plaintiff claims to be a member.” Roberts v. United States, 745 F.3d 1158, 1162 (Fed. Cir.
2014).
“A statute is not money-mandating when it gives the government complete discretion
over the decision whether or not to pay an individual or group.” Doe v. United States, 463 F.3d
1314, 1324 (Fed. Cir. 2006) (emphasis added). Even statutes that appear to be discretionary can
be money-mandating. An apparently discretionary statute is money-mandating “when an
analysis of congressional intent or the structure and purpose of the statute reveal one of the
following: (1) the statute has ‘clear standards for paying’ money to recipients, (2) the statute
specifies ‘precise amounts’ to be paid, or (3) the statute compels payment once certain conditions
precedent are met.” Id. (quoting Samish Indian Nation, 419 F.3d at 1364-65). 6 Although this
test apparently requires the “precise amounts to be paid” to be clear from the statute, the Federal
Circuit has noted that a statute may be found to be money-mandating even when an agency
“retains some discretion to determine the amount of an award, within prescribed limits . . . .”
Doe v. United States, 100 F.3d 1576, 1582 (Fed. Cir. 1996) (citing Bradley v. United States,
870 F.2d 1578 (Fed. Cir. 1989)).
“‘Statutory construction must begin with the language employed by Congress and the
assumption that the ordinary meaning of that language accurately expresses the legislative
purpose.’” Gross v. FBL Fin. Servs., Inc., 557 U.S. 167, 175 (2009) (quoting Engine Mfrs. Assn.
v. South Coast Air Quality Management Dist., 541 U.S. 246, 252 (2004)). “When terms used in
a statute are undefined, [courts] give them their ordinary meaning.” Asgrow Seed Co. v.
Winterboer, 513 U.S. 179, 187 (1995). “It is a cardinal principle of statutory construction that a
statute ought, upon the whole, to be so construed that, if it can be prevented, no clause, sentence,
or word shall be superfluous, void, or insignificant.” TRW Inc. v. Andrews, 534 U.S. 19, 31
(2001) (cleaned up). “The plain meaning that we seek to discern is the plain meaning of the
whole statute, not of isolated sentences.” Beecham v. United States, 511 U.S. 368, 372 (1994).
Section 9009c does not provide the Administrator discretion as to whether to award a
grant. Section 9009c(b)(1) establishes the RRF, with subsection (b)(2)(A) specifically
appropriating $28.6 billion in funding for the RRF and authorizing the SBA to place an “amount
otherwise available” into the RRF. The next provision, (b)(2)(B)(i) goes on to specify that $5
billion should be set aside for certain smaller businesses, and that the remaining $23.5 billion
should be available “to award grants under subsection (c) in an equitable manner to eligible
6
Notably, both Doe and Samish Indian Nation frame this test with the disjunctive “or,” but a
later case, Roberts v. United States, without explanation, frames this test with the conjunctive
“and,” requiring all three prongs to be met. 745 F.3d at 1163 (citing Perri v. United, 340 F.3d
1337, 1343 (Fed. Cir. 2003) (finding all three factors met in that case without framing them as
elements of a test)). Because Doe and Samish Indian Nation both preceded Roberts and, unlike
Perri, explicitly expounded a three-part disjunctive test, the Court relies on the earlier framing of
the test.
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entities of different sizes based on annual gross receipts.” Subsection (b)(2)(B)(ii) allows the
Administrator to “make adjustments as necessary to the distribution of funds under clause (i)(II)
based on demand and the relative local costs in the markets in which eligible entities operate.”
Skipping over subparagraph (b)(2)(C), which deals with when the Administrator is allowed to
make awards after the initial period, subsection (b) ends with paragraph (b)(3)’s unambiguous
command that “[t]he Administrator shall use amounts in the Fund to make grants described in
subsection (c).”
This language allows the Administrator no discretion as to the uses to which she may put
the amounts in the RRF. None of provisions in subsection (b) establishing the RRF provide any
discretion to the Administrator to refuse to use the money in the RRF to make a grant. At best,
the references to “award[ing] grants under subsection (c) in an equitable manner” in section
9009c(b)(2)(B)(i)(II) and to “mak[ing] adjustments as necessary to the distribution of funds
under clause (i)(II) based on demand and the relative local costs” in section 9009c(b)(2)(B)(ii)
allow the Administrator to apportion the funds into different pots of money from which she may
make award to different groups of “eligible entities of different sizes based on annual gross
receipts.” Notably, these provisions do not affect the amount any given applicant may receive,
which is specifically governed by section 9009c(c)(4)(B). That provision species that “[e]xcept
as provided in this paragraph,” thereby excluding the provisions in subsection (b), “the amount
of a grant made to an eligible entity under this subsection shall be equal to the pandemic-related
revenue loss of the eligible entity.” (Emphasis added). It is unclear from the complaint if the
Administrator used her authority to create different pots of money, but even if she did, there is no
provision that would have authorized her to deny an award to an eligible entity that fell within
the size requirements for award from any specific pot of money.
Beyond restricting the uses the Administrator may make of the amounts in the RRF, the
statutory language does not grant the Administrator any discretion as to how much any given
applicant is to be awarded. Section 9009c(c)(4)(B)(i) requires that, subject to aggregate
maximum award limits, “the amount of a grant made to an eligible entity under this subsection
shall be equal to the pandemic-related revenue loss of the eligible entity,” with pandemic-related
revenue loss defined in section 9009c(a)(7). At best, section 9009c(a)(7) allows the
Administrator to offer alternate formulas for calculating pandemic-related revenue loss in certain
situations. But that does not give the Administrator the ability to reject any given application for
award.
Further, section 9009c(b)(3) requires the Administrator to use the money “in the Fund to
make grants described in subsection (c),” and subsection (c)(1) precisely specifies the order in
which the Administrator is required to award grants: “in the order in which applications are
received by the Administrator.”
The provisions of subsection (c) go on to specify application requirements, priorities in
awarding grants, the way grant amounts are to be determined, and the permissible uses of the
grants. None of the remaining provisions, however, vests the Administrator with any discretion
over whether to make an individual grant award or authorize her to make awards in the order in
which applications are processed or any other order in addition to or in lieu of the order specified
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by Congress in the law. 7 Instead, these provisions, combined with the requirements that an
applicant prove a pandemic-related revenue loss under subsection(a)(7), only give the
Administrator a ministerial role in implementing the RRF.
Importantly, section 9009c is not an unlimited money-mandate requiring the payment of
grants to all eligible entities. Section 9009c(b)(3) only requires the Administrator to “use
amounts in the Fund to make grants described in subsection (c).” In other words, the statute does
not provide a general entitlement and is not a money-mandating grant to all eligible entities;
instead, the provision requires the use of a specific fund of money to be awarded to eligible
entities in a specified order until the funds are exhausted. Once the funding runs out, applicants
are out of luck. The plaintiffs allege they fall within the order of payment specified by Congress
and are entitled to payment because they filed their applications on the first day applications
could be submitted, yet applicants that filed their applications later than the plaintiffs received
grants and the plaintiffs did not. (ECF 1 at ¶¶ 5, 9, 13, 138.)
Section 9009c(c)(1) requires payment of grants in the order applications are received. By
its plain terms, therefore, section 9009c(c)(1) establishes an individual right for eligible entities
to receive awards based on, with limited exceptions, a first-come, first-served basis. The
congressional intent and consequence of this provision is obvious: diligent applicants would be
assured an award over less diligent ones. See Vitolo v. Guzman, 999 F.3d 353, 357 (6th Cir.
2021) (“The key to getting a grant is to get in the queue before the money runs out. The Small
Business Administration distributes money on a first come, first served basis.”). The approach
taken by Congress makes sense because Congress knew the demand would exceed the amount of
funding it was providing for the RRF.
If an eligible entity filed an application right after the first $28.6 billion worth of eligible
applications were submitted, it would only have itself to blame for not receiving an award.
Diligent applicants would not be subject to unpredictable administrative processing speeds; no
applicant would lose out on a grant simply because the processor assigned to consider its
application happened to be on vacation or home with a sick child that day. In short, Congress
wrote into the law a clear order of awardees for a grant; it specifically rejected a lottery system in
which some applicants apply for a grant in one order but receive them in a totally different one
outside of their control. Congress rejected the notion that the vicissitudes and vagaries of
7
At best, the Administrator had some discretion to set aside additional funding for priority
applicants. Section 9009c(c)(3)(A) provides that “[t]he Administrator may take such steps as
necessary to ensure that [priority applicants] described in this subparagraph have access to grant
funding under this section after the end of such 21-day period.” This provision is referring to the
need to take systemic steps, such as reserving necessary sums of money, and does not otherwise
authorize the Administrator to exercise discretion when reviewing specific applications. Given
the SBA stopped processing priority applications on May 23, 2021 (see ECF 1 at ¶ 59), and the
“SBA awarded the final RRF grants to [p]riority [a]pplicants” on May 27, 2021 (id. ¶ 65), there
is no indication that the Administrator took any such steps.
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administrative or bureaucratic happenstance would influence which applicants received a grant
and which did not.
Despite the clear congressional directive spelled out in the statute itself, the SBA decided
to make awards in the order that it processed applications, precisely the kind of bureaucratic
vagary Congress sought to avoid. The defendant offers a weak justification of the SBA’s
interpretation that the statute allowed it to make awards in the order that applications were
processed. In support of the SBA’s approach, the defendant musters two authorities in a
footnote. (ECF 7 at 20 n.5.)
First, although a court must give undefined statutory terms “their ordinary meaning,”
Asgrow Seed, 513 U.S. at 187, the defendant inventively argues for a plausible but uncommon
definition of the word “receive” based on a citation to a single dictionary’s definition of the word
“receive” as “‘[t]o admit or accept (a person or thing).’” (ECF 7 at 13 n.5 (quoting Receive,
Oxford English Dictionary (3d ed. 2009) (“OED”).) According to the defendant, this means that
section 9009c(c)(1)’s requirement to “award grants to eligible entities in the order in which
applications are received by the Administrator” only applied once the Administrator fully
processed and approved an application, i.e., accepted it.
The defendant’s interpretation, however, is not even strongly supported by the OED.
Digging further into the primary definition of receive, the OED, available online with some
revisions, specifies that this usage of “receive” is often rare or obsolete. See Receive, OED,
https://www.oed.com/dictionary/receive_v?tab=meaning_and_use#26545903 (last visited July
24, 2024). As reflected in the online edition, many of the detailed definitions under the
defendant’s cited headline definition are also described as being “chiefly [used] in religious
contexts,” “obsolete,” “chiefly historical,” applying only to a person, or used in combination
with references to personal objects or simple predicates, such as “as,” “for,” “to,” or “to be.” Id.
The defendant’s proffered definition must be rejected. “‘It is a fundamental canon of
statutory construction that words will be interpreted as taking their ordinary, contemporary,
common meaning,’ which may be derived from ‘dictionaries from the era of the statutory
provision’s enactment.’” New York & Presbyterian Hosp. v. United States, 881 F.3d 877, 882
(Fed. Cir. 2018) (quoting Sandifer v. U.S. Steel Corp., 571 U.S. 220, 227 (2014) (cleaned up)).
Contrary to the single “rare” or “obsolete” definition of “receive” relied on by the
defendant, there are several other dictionaries whose primary definition of “receive” is “to come
into possession of,” Receive, Merriam-Webster, https://www.merriam-
webster.com/dictionary/receive (last visited July 24, 2024); “to get or be given something,”
Receive, Cambridge Dictionary, https://dictionary.cambridge.org/us/dictionary/english/receive
(last visited July 24, 2024); Receive, The Britannica Dictionary,
https://www.britannica.com/dictionary/receive first in the context (last visited July 24, 2024)
(same); or “to get something that someone has given or sent to you,” Receive,
https://dictionary.cambridge.org/us/dictionary/essential-american-english/receive (last visited
July 24, 2024).
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In contrast, the defendant’s asserted definition seems to be overly technical or outdated
rather than the ordinary, plain meaning of the statutory term “receive.” To illustrate, imagine an
applicant called the SBA to inquire, “have you received my application?” It would be
inconsistent with modern, common usage of the word for an SBA representative to reply “no,
we’re still processing it.” Or, more generally, imagine if a person sent someone a letter and
asked the recipient if the letter had been received. If the recipient said no, the sender would
naturally think it had not yet arrived or was lost in the mail, not that the recipient left it in the
mailbox and thereby did not “admit or accept” it into his home. Absent some indication from the
text of section 9009c that this more arcane and less colloquial meaning of the word “receive”
was intended, no person would understand the plain meaning of “receive” to mean “accept.”
This reading is especially applicable because section 9009c(c)(2)(B) directs the Administrator
“[i]n accepting applications for grants under this subsection” to “prioritize the ability of each
applicant to use their existing business identifiers . . . .” (Emphasis added). This language
reflects that Congress intended to draw a distinction between the SBA accepting applications and
simply receiving them. See Intel Corp. v. Qualcomm Inc., 21 F.4th 784, 793 (Fed. Cir. 2021)
(quoting Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 170
(2012)) (“‘A word or phrase is presumed to bear the same meaning through a text; a material
variation in terms suggests a variation in meaning.’”).
Most importantly, the defendant’s interpretation also would effectively make section
9009c(c)(1) a nullity, as the SBA likely would have defaulted to making awards in the order in
which it processed applications; a congressional directive would not have been necessary.
Reading the statute as the defendant proposes would effectively nullify one of the RRF’s central
provisions. Such a reading is impermissible. See United States v. Menasche, 348 U.S. 528, 538-
39 (1955) (cleaned up) (“The cardinal principle of statutory construction is to save and not to
destroy. It is [a court’s] duty to give effect, if possible, to every clause and word of a statute,
rather than to emasculate an entire section, as the Government’s interpretation requires.”); Scalia
& Garner, supra, at 174-79 (the Surplusage Canon). Reading “receive” to carry its normal
meaning avoids that problem.
Creating surplusage is not the only serious problem with the defendant’s proposed
definition of “receive.” Unless the context demands otherwise, “there is a natural presumption
that identical words used in different parts of the same act are intended to have the same
meaning.” Atlantic Cleaners & Dyers, Inc. v. United States, 286 U.S. 427, 433, (1932); accord
Util. Air Regul. Grp. v. EPA, 573 U.S. 302, 319-20 (2014). The defendant’s proffered definition
of “receive” in the statute appears to be incompatible with at least one usage of the word
“received” in section 9009c. Section 9009c(a)(7)(C)(i) provides “the expenses described in
subsection (c)(5)(A) that were incurred by the eligible entity minus any gross receipts received.”
Businesses generally do not “accept” gross receipts, i.e., money, they come into possession of or
are given it. The defendant’s reading of “receive” instead of the more common understanding of
the term is not a good fit for the statute.
Second, the defendant relies on an out-of-context quote from Vitolo to support the SBA’s
interpretation of the statute. That case focused on the constitutionality of the priority period for
women-owned and socially and economically disadvantaged small business concerns under
section 9009c(c)(3). The Sixth Circuit’s opinion did note that after the priority period ended,
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“‘[t]he statute now requires [SBA] to begin processing grant requests in the order they were
received, without regard to the applicants’ race or sex.’” (ECF 7 at 20 n.5 (quoting Vitolo,
999 F.3d at 359) (emphasis by the defendant).) In its opinion, however, the Sixth Circuit also
noted that “[t]he key to getting a grant is to get in the queue before the money runs out. The
[SBA] distributes money on a first come, first served basis.” Vitolo, 999 F.3d at 357. The
statement that the SBA had to process grants in the order in which the applications were received
does not in any way suggest there was no statutory requirement that the SBA pay grants to
applicants in the order in which applications were received; instead, the Sixth Circuit’s comment
complements the statutory obligation, because processing applications was a prerequisite to
making a grant award.
Finally, the defendant argues the SBA had to make grant awards in the order applications
were processed because otherwise “no money could be disbursed until the first-filed application
was processed to approval.” (ECF 7 at 20 n.5.) This defense, however, presents a policy
argument that at best attempts to argue the absurdity of following section 9009c(c)(1)’s language
literally.
Even accepting the argument that Congress could not have intended that each applicant
literally had to wait until each earlier applicant received a grant, that would only suggest the
SBA could have examined the amount sought by each application in the order received until the
amounts sought totaled $28.6 billion. Then once an application in that group was denied, it
could start processing the next application in line from outside that group. The SBA then could
have made awards on later-filed applications, provided it had reserved amounts claimed by
earlier-filed applicants until those applications were either paid out or denied as ineligible. The
plaintiffs allege that the SBA has previously adopted this course in other grant programs,
suggesting this approach was administratively feasible. (ECF 1 at ¶ 79(b).) This process would
have ensured no earlier applicant was harmed by awarding a grant to a later applicant, thereby
satisfying both the text and the intent of section 9009c(c)(1).
The Administrator therefore was required to use the RRF to make grants under section
9009c(b)(3), and to do so in the order specified by section 9009c(c)(1), an order that gave each
eligible applicant an individual right to receive payment before any later applicant. Because the
SBA lacked discretion under section 9009c as to whether to pay money to specific applicants
who meet the requirements of the statute or as to the amounts to award a specific applicant,
section 9009c can fairly be read to be money-mandating. It does not matter that section 9009c
does not literally command payment to all eligible entities because of the limited funding
provided to the RRF, what matters is that the plaintiffs fall within the scope of section 9009c’s
money-mandate. 8 See Fisher v. United States, 402 F.3d 1167, 1175 (Fed. Cir. 2005) (citing
8
To the extent the defendant argues the statute is not money-mandating because the
Administrator did not determine the plaintiffs were eligible to receive a grant (ECF 7 at 20
(“Congress could not have intended SBA to hand out money without an eligibility
determination”), that fact alone does not render the statute not money-mandating. “The fact that
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Sawyer v. United States, 930 F.2d 1577, 1580 (Fed. Cir. 1991) and noting that the statute at issue
in Sawyer was held to be money-mandating “because when the requirements of the statute are
met . . . the [plaintiff] is entitled to compensation”); Roberts v. United States, 745 F.3d at 1162.
When the statutory provisions are read together, it becomes clear that section 9009c
required the Administrator to award grants to all eligible applicants, the hallmark of a money-
mandating statute, until the RRF was exhausted. The Court relies on the “shall use” and “shall
award” language in section 9009c(b)(3) and (c)(1) to find the statute money-mandating by its
plain terms. Even if this language simply authorized the Administrator to make awards, section
9009c would still be money-mandating because it would meet each of the three prongs of the test
for determining if a discretionary statute is money-mandating. See Samish Indian Nation,
419 F.3d at 1364-65; Doe, 463 F.3d at 1324; Perri v. United, 340 F.3d 1337, 1342-43 (Fed. Cir.
2003).
Section 9009c therefore is money-mandating, but it is a limited mandate applying only to
the money within the RRF because section 9009c(b)(3) only requires making awards to
applicants out of the money available within the RRF. Because the plaintiffs allege sufficient
facts to demonstrate they likely were eligible entities (ECF 1 at ¶¶ 128-134), a contention the
defendant does not currently dispute, section 9009c is “money-mandating as to the class of
which plaintiff[s] claim[ ] to be a member.” Roberts, 745 F.3d at 1162.
3. Redressability and Mootness
The defendant’s final jurisdictional arguments are that the plaintiffs’ claims are not
redressable and are moot. (ECF 7 at 14-19.) The defendant bases its redressability argument on
the lack of available sums remaining in the RRF for any further awards. (Id. at 15-16.) The
defendant also argues that because no funds remain available in the RRF and any funds awarded
now from the RRF would have to be returned to the Treasury under the Fiscal Responsibility Act
or section 9009c(c)(6), the plaintiffs’ claims are moot. (Id. at 16-19.)
Redressability is one of the three irreducible constitutional requirements for standing. 9
See Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 102-03 (1998). For an injury to be
the statute imposes requirements for the payment of money does not mean that only claimants
who have been determined by a Government official to meet those requirements have a right to
the money the statute provides. It is the statute, not the Government official, that provides for
the payment. If the Government official’s determinations under the statute are in error,” or as
here were never made in the first place, “the court is there to correct the matter, and to have the
proper determinations made.” Fisher, 402 F.3d at 1175.
9
The defendant does not contest that the plaintiffs have met the other two requirements for
standing established in Lujan v. Defenders of Wildlife: (1) an actual, concrete, and particularized
injury that is (2) fairly traceable to the defendant. See 504 U.S. 555, 560-61 (1992). The
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redressable, “it must be likely, as opposed to merely speculative, that the injury will be redressed
by a favorable decision.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992) (cleaned up).
In contrast, a claim becomes moot when “in the course of litigation a court finds that it can no
longer provide a plaintiff with any effectual relief . . . .” Uzuegbunam v. Preczewski, 141 S. Ct.
792, 796 (2021); see Momenta Pharms., Inc. v. Bristol-Myers Squibb Co., 915 F.3d 764, 770
(Fed. Cir. 2019) (quoting Milwaukee Police Ass’n v. Bd. of Fire & Police Comm’rs of the City of
Milwaukee, 708 F.3d 921, 929 (7th Cir. 2013) (“In essence, ‘mootness is the doctrine of standing
set in a time frame; that is, the requisite personal interest that must exist at the time of
commencement of the litigation (standing) must continue throughout its existence
(mootness).’”).
Any argument that the plaintiffs’ claims are not redressable because no money remains in
the RRF is unavailing. “Congress can also create an obligation directly by statute, without also
providing details about how it must be satisfied,” and “a subsequent failure to appropriate
enough funds neither ‘abrogate[s] nor suspend[s]’ the Government’s pre-existing commitment to
pay.” Maine Cmty. Health Option, 590 U.S. at 309 (quoting United States v. Langston, 118 U.S.
389, 394 (1886)). Thus, “the mere failure of Congress to appropriate funds, without further
words modifying or repealing, expressly or by clear implication, the substantive law, does not in
and of itself defeat a Government obligation created by statute.” N.Y. Airways, Inc. v. United
States, 369 F.2d 743, 748 (1966).
The absence of money in the RRF does not prevent the plaintiffs from recovering money
damages, because money damages would not be paid out of the RRF. The Court of Federal
Claims does not award equitable relief requiring payment from a specific funding source.
Instead, with one exception not relevant here, “every final judgment rendered by the United
States Court of Federal Claims against the United States shall be paid out of any general
appropriation therefor, on presentation to the Secretary of the Treasury of a certification of the
judgment by the clerk and chief judge of the court.” 28 U.S.C. § 2517 (entitled “Payment of
judgments”). In other words, the Judgment Fund is generally the source for the payment of
awards by the Court of Federal Claims. 31 U.S.C. § 1304(a)(3)(A) (appropriating to the
Judgment Fund amounts necessary to pay final judgments and settlements payable under
28 U.S.C. § 2517).
It is true that “funds may be paid out [of the Judgment Fund] only on the basis of a
judgment based on a substantive right to compensation based on the express terms of a specific
statute.” Off. of Pers. Mgmt. v. Richmond, 496 U.S. 414, 432 (1990). The fact a plaintiff must
have a substantive right to compensation is only jurisdictional, however, to the extent the
plaintiff must rely on a money-mandating statute, not that the plaintiff must prove its case on the
merits. See Fisher, 402 F.3d at 1176 (citing Palmer v. United States, 168 F.3d 1310, 1313 (Fed.
Cir. 1999)) (noting that when a “money-mandating statute, applied to the facts proven, did not
afford the remedy claimed,” it is “a failure on the plaintiff’s part to state a claim on which relief
plaintiffs have met these requirements by pleading that they were each injured by the SBA’s
failure to award them the grants they sought. (See ECF 1-2.)
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could be granted, and not a jurisdictional defect”). The merits of a claim do not affect its
redressability because, as Judge Wheeler concluded, “the Judgment Fund is generally available
to pay the liabilities of the Government as enforced by this Court. . . . When a statute . . . is
money-mandating, the Judgment Fund will always be an appropriation from which the
Government’s promises can be fulfilled.” Molina Healthcare of California, Inc. v. United States,
133 Fed. Cl. 14, 35 (2017). 10 The exhaustion of funds in the RRF therefore does not go to
redressability of the plaintiff’s claim for damages because section 9009c is money-mandating;
the only question is whether the plaintiffs are entitled to recover money damages on the merits.
Recognizing the problem with its argument (ECF 10 at 9) (“Plaintiffs are generally
correct that when a statute is money-mandating, the failure to appropriate funds does not
eliminate the Government’s payment obligation”), the defendant falls back on the argument that
its liability is limited by section 9009c to the already-expended RRF, making the Judgment Fund
unavailable and the plaintiffs’ claims not redressable. (Id. at 9-10 n.4.)
Under its spending power, Congress can limit the government’s liability under money-
mandating statutes by making any payment obligation subject to the availability of funds or
limiting expenditures to certain amounts. Such limitations do not, however, present
redressability concerns. Instead, the cases that have addressed the issue of a statutory limitation
on expenditures have considered the issue a question of entitlement to recovery. See Prairie
Cnty., Montana v. United States, 782 F.3d 685, 691 (Fed. Cir. 2015) (affirming the dismissal of a
plaintiff’s claim for failure to state a claim because of the existence of a liability cap), cert.
denied, 577 U.S. 923 (2015); Greenlee Cnty., Ariz. v. United States, 487 F.3d 871, 887-81 (Fed.
Cir. 2007) (same), cert. denied, 552 U.S. 1142 (2008); Star-Glo Assocs., LP v. United States,
59 Fed. Cl. 724, 734-35 (2004) (granting summary judgment against a plaintiff when a statutory
cap barred recovery), aff’d on other grounds, 414 F.3d 1349 (Fed. Cir. 2005).
For example, in Star-Glo Associates, LP v. United States, the Federal Circuit considered
whether a benefits program intended to compensate citrus growers included a statutory cap on
expenditures that barred a claim from two plaintiffs, who claimed the Department of Agriculture
had used the wrong definition of “acre” in calculating their grant award. 414 F.3d at 1350-53.
Despite finding there was a statutory expenditure cap that had been met by the time the plaintiffs
filed suit, the Federal Circuit did not suggest that it lacked jurisdiction due to any lack of
standing by the plaintiffs or lack of redressability. Id. at 1354-55. Instead, rather than
addressing the effect on the statutory cap on expenditures when the cap had not been reached at
the time a claim accrued, the Federal Circuit held on the merits that the plaintiffs were not
10
Judge Wheeler’s broad language in Molina notwithstanding, the Judgment Fund is
unavailable if “payment is [ ] otherwise provided for.” 31 U.S.C. § 1304(a)(1). One such
example is in cases under the National Vaccine Injury Compensation Program, in which
payments for those injuries are made from the Vaccine Injury Compensation Trust Fund,
pursuant to 42 U.S.C. § 300aa–15(i)(2) and 26 U.S.C. § 9510. The defendant has not, however,
argued that other funding sources are available, and none is readily apparent, so this limitation is
not relevant to the plaintiffs’ claims.
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entitled to further funds because the Department of Agriculture had used the correct definition of
“acre.” Id. at 1355-58.
In short, when the effect of a cap on expenditures was clear, courts considering such
statutory limitations on funding have treated them as an absolute affirmative defense, the success
on which by the defendant precluded the award of damages to a plaintiff on the merits. Even in
Star-Glo, in which a cap on expenditures existed but its effect was unclear, no court ever
suggested that the cap presented a threshold jurisdictional issue that would bar consideration of
the merits of a claim. The defendant has not identified any contrary authority in which a statute
was held to be money-mandating, but a plaintiff’s claims were not redressable due to an
exhaustion of funds. The question of whether there is a statutory cap limiting the defendant’s
liability therefore confuses redressability with “whether the plaintiff has established a right to
recover, a question which it is inappropriate to treat at this stage of the litigation.” Chafin v.
Chafin, 568 U.S. 165, 174 (2013) (cleaned up).
On mootness, the defendant makes largely the same arguments. It attempts to find
additional support in section 9009c(c)(6)’s mandate that any unused grant funds held by eligible
entities after March 11, 2023, must be returned to the treasury and in the Fiscal Responsibility
Act’s rescission of unobligated funds. (ECF 7 at 16-19.) The defendant also cites several district
court decisions which dismissed claims raised by eligible entities on mootness grounds because
the RRF was exhausted and/or because the plaintiffs raised their claims after March 11, 2023.
(Id. at 18 (citing Reboot Macon, 2023 WL 4672395, at *5; Keener v. United States, No. 2:22-
1640, 2023 WL 2478367, at *7 (D.S.C. Mar. 13, 2023)).)
The flaw in the defendant’s mootness argument, however, lies in the differences between
the relief available in the district courts and this court. The district courts under the APA can
only award “relief other than money damages.” 5 U.S.C. § 702. Any request for injunctive or
declaratory relief related to grant applications were rendered academic when the RRF was
exhausted because such relief could not cause the plaintiffs to receive any grant money. See
Reboot Macon, 2023 WL 4672395, at *4 (“Because the RRF has run dry, and because the only
relief available to the plaintiffs requires the Court to direct the SBA to process RRF applications
in the order that they were received, a depleted RRF renders that requested relief moot and the
government is entitled to dismissal.”); Keener, 2023 WL 2478367, at *7 (“However, if
defendants were to show evidence that the RRF program lacks funds, at that point plaintiffs’
claims would be moot.”).
In contrast, the Court of Federal Claims awards money damages and can only rarely
provide injunctive or other equitable relief (outside of bid-protest cases under 28 U.S.C. §
1491(b)) “as an incident of and collateral to any” judgment for money. 28 U.S.C. § 1491(a)(1);
see James v. Caldera, 159 F.3d 573, 580 (Fed. Cir. 1998) (cleaned up) (“Stated another way, the
Court of Federal Claims has no power to grant affirmative non-monetary relief unless it is tied
and subordinate to a money judgment.”). Money damages are paid out of the Judgment Fund
and are not orders for the award of money from any other specific funds. 28 U.S.C. § 2517; 31
U.S.C. § 1304(a)(3)(A). An award of money damages therefore would not be subject to the
RRF’s requirement to return grant funds nor the Fiscal Responsibility Act’s recission of funds as
these laws do not include any language affecting monetary awards from the Judgment Fund. The
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possibility of a damages award therefore is not moot and could provide the plaintiffs with the
relief they seek.
The only way for the plaintiffs’ claims for money damages to be mooted is for them to
receive grants or otherwise be voluntarily compensated by the defendant. Unless and until this
happens, their claims are not moot.
To summarize, the plaintiffs’ claim that section 9009c, read properly, commands the
payment of money to them. Bowen does not require the plaintiffs to raise their claims under the
APA in district court. The plaintiffs’ case does not present Bowen’s specific circumstances, and
monetary relief is adequate to redress retrospectively their injuries for the SBA’s alleged failure
to pay them the one-time grants they allege the SBA was obligated to provide under the
statute. The plaintiffs therefore present a classic money-mandating claim within the Tucker Act
jurisdiction of the Court of Federal Claims, 28 USC § 1491(a). The only way such a claim may
be dismissed for lack of jurisdiction is if the statute cannot fairly be construed to command the
payment of money; if the plaintiffs fail to allege facts demonstrating they are within the class of
beneficiaries entitled to payment under that statute; or if the plaintiffs lack standing. As the
plaintiffs have overcome all three hurdles, the plaintiffs’ claims are within this court’s
jurisdiction and would be redressable by the Judgment Fund if the plaintiffs succeed on the
merits.
C. Rule 12(b)(6)
Although not raised by the parties, the Court sua sponte raised the issue of whether the
plaintiffs have failed to state a claim because of the possible existence of a cap on the
defendant’s liability under section 9009c. The parties were directed to file supplemental briefs
addressing this issue, specifically:
1 – Does 15 U.S.C. § 9009c(b)(2)(A) impose a statutory cap on the
amount of money to be spent under the Restaurant Revitalization
Fund, or does § 9009c create an uncapped liability to support an
award to the plaintiffs, either directly or through the Judgment
Fund?
2 – Presuming that § 9009c caps liability and that § 9009c(c)(1)
required the SBA to award grants strictly in the order in which
applications were received, does the exhaustion of the available
funds through the award of grants to entities who submitted their
applications after the plaintiffs foreclose the plaintiffs from stating
a claim for relief? What effect does the Fiscal Responsibility Act’s
de-obligation provision and § 9009c(c)(6)’s requirement that
unspent funds be returned to the Treasury have on this question?
(ECF 13).
Without conceding the existence of jurisdiction, the defendant argues that 15 U.S.C.
§ 9009c(b)(2)(A) imposes a statutory cap that prevents the plaintiffs from stating a claim because
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the statute included a specific amount of money to be expended, $28.6 billion. In support, the
defendant relies on language from Maine Community Health that noted “‘Congress c[an]
expressly limit[ ] an obligation to available appropriations or specific dollar amounts.’” (ECF 16
at 1-2 (quoting 590 U.S. at 313) (edits by the Court).) Any resort to the Judgment Fund, the
defendant argues, would be an inappropriate circumvention of Congress’s intent to cap the
amount available for the RRF. (Id. at 4-6.) Instead, the plaintiffs should have challenged the
SBA’s interpretation of section 9009c(c)(1) and disbursements of funds under the APA while the
RRF still contained funds. (Id. at 6-7 & 6-7 n.4.) Further, the defendant argues that the Fiscal
Responsibility Act rescinded any payment obligation because, citing to a district court opinion,
the rescinded “‘unobligated balances’ were those ‘funds that the SBA has not yet promised to
pay to a specific entity that has applied and been approved for payment.’” (Id. at 9 (quoting W6
Rest. Grp., 2024 WL 1973132, at *9).) Finally, the defendant reiterates its argument that the
obligation to return unspent RRF funds prevents the plaintiff from stating a claim because to
allow otherwise would circumvent Congress’s intent to forfeit unspent RRF grant awards. (Id. at
10 (citing Reboot Macon, 2023 WL 4672395, at *5).)
In contrast, the plaintiffs argue that section 9009c(b)(2)(A) does not impose a statutory
cap because the statute is not limited to available appropriations, but instead included a specific
appropriation “in addition to amounts otherwise available.” Relying on Samish Indian Nation v.
United States, the plaintiffs argue that section 9009c(b)(2)(A) only “narrow[ed] the group of
entities SBA was obligated to pay (based on the order applications were received)” but did not
“limit liability for amounts the agency was obligated to pay.” (ECF 17 at 8-10 (citing 657 F.3d
1330, 1339-41 (Fed. Cir. 2011), vacated as moot, 568 U.S. 936 (2012)).) Even if section
9009c(b)(2)(A) imposed a cap, the plaintiffs argue that they have stated a claim for relief that can
be granted because the SBA’s erroneous disbursements did not satisfy the SBA’s obligation to
them. Citing to the Government Accountability Office’s (“GAO”) Principles of Federal
Appropriations Law (“GAO Redbook”) and Steven N. Tomanelli, Appropriations Law 43
(2003), the plaintiffs argue that the obligation to pay them arose at the time they submitted their
applications. 11 (ECF 17 at 10-13.) Any improper payments, the plaintiffs argue, must be paid to
them as damages up to the amount appropriated. (Id. at 13-14 (quoting Sutton v. United States,
256 U.S. 575, 582 (1921)) (“‘Unless the parties can agree as to the facts, the case should be
remanded to the Court of Claims to determine what, if any, amount was erroneously charged
against the appropriations . . . ; and for the amount of such improper charges, if any, judgment
should be entered for the petitioner.’”).) Finally, the plaintiffs argue that the Fiscal
11
The GAO Redbook “present[s] a basic reference work covering the legal issues that arise
as the Comptroller General carries out his statutory duties to issue decisions and opinions
concerning the use and obligation of appropriated funds.” United States GAO, GAO Redbook
Preface (4th ed. 2016), available at https://www.gao.gov/assets/2019-11/675699.pdf. The
Supreme Court, the Federal Circuit, and other circuit courts “have relied on the opinions of the
[GAO] as expressed in [the GAO Redbook] . . . whose opinions, while not binding, are ‘expert
opinion[s], which we should prudently consider.’” Thompson v. Cherokee Nation of Oklahoma,
334 F.3d 1075, 1084 (Fed. Cir. 2003) (citing, inter alia, Lincoln v. Vigil, 508 U.S. 182, 192,
(1993); Delta Data Sys. Corp. v. Webster, 744 F.2d 197, 201 (D.C. Cir. 1984)).
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Responsibility Act and section 9009c(c)(6) do not foreclose their claims. As to the former, the
plaintiffs emphasize that only “unobligated balances” were rescinded, but that the statute did not
attempt to de-obligate any funds that were already due. (Id. at 15-16.) And as for the latter, the
plaintiffs argue that this provision does not prevent the SBA from re-awarding any recovered
erroneous disbursements before they are returned to the treasury and does not affect damages
from the Judgment Fund. (Id. at 16.)
Section 9009c(b)(2)(A) is unusual; the parties have not cited any precedent involving a
statute like it, and the Court has found none either. On the one hand, the statute appropriated a
specific sum of money for the RRF. On the other hand, it also authorized the SBA, in a
paragraph entitled “Appropriations,” to use “amounts otherwise available” for the RRF. Despite
appropriating a specific sum of money, the statute was also open-ended and allowed an
unspecified amount of money be used for the RRF. This unusual amalgam muddies the water as
to whether section 9009c(b)(2)(A) imposed a cap on the defendant’s liability, because it did not
limit RRF grants to the specific sum of money appropriated to the RRF.
Because the statute here is ambiguous on this point, it is important to examine exactly
what the Federal Circuit has done in evaluating whether a funding limit in a money-mandating
statute prevents a plaintiff from stating a claim.
As previously noted, in Star-Glo the Federal Circuit considered whether a benefits
program intended to compensate citrus growers included a statutory funding cap that barred a
claim. Section 810(e) of Public Law No. 106-387 (2000) provided that “the Secretary of
Agriculture shall use $58,000,000 of the funds of the Commodity Credit Corporation to carry out
this section [to compensate citrus tree growers for losses from citrus canker], to remain available
until expended.” The plaintiffs in the case had previously sought and received funds under the
program but then sued, contending the Department of Agriculture had used the wrong type of
acreage measure to calculate the compensation due to them. At the time the plaintiffs filed their
claims with the Department of Agriculture, the $58 million had not been expended. By the time
the plaintiffs filed their lawsuit, however, the $58 million cap had been met. Star-Glo, 59 Fed.
Cl. at 726-27. The plaintiffs argued that the lack of terms such as “not to exceed” or “not more
than” meant there was no statutory cap. Judge Horn held, however, that the exhaustion of the
authorized funds barred the plaintiffs’ claims. Id. at 732-35.
On appeal, the Federal Circuit affirmed. Although the Federal Circuit acknowledged that
“the statutory text is ambiguous,” after looking to legislative history the Circuit held that the
language imposed a funding cap. Star-Glo, 414 F.3d at 1354-55. The Federal Circuit relied on
language from a conference report in which Congress explained that “section 810 ‘directs the
Secretary of Agriculture to use not more than $58,000,000 for replacement of citrus trees and for
compensation for losses as a result of citrus canker.’” Id. at 1355 (emphasis added by Federal
Circuit) (quoting H.R. Conf. Rep. No. 106-948, at 147 (2000)).
Two points distinguish this case from Star-Glo. First, even if reliance on legislative
history were appropriate in construing the meaning of a statute, no such clarifying legislative
history exists for section 9009c and cannot serve to aid in construing the provision. Second, the
relevant statute in Star-Glo, unlike section 9009c, did not provide for any potentially available
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additional funds beyond the $58 million appropriated. Further, the Federal Circuit did not
ultimately base its decision in Star-Glo on the effect of the cap on expenditures in the statute.
Instead, the court held that the plaintiffs were not entitled to recover on the merits of their claim.
Id. at 1356-58.
The Federal Circuit did expressly reach the effect of a cap on expenditures in Greenlee
County. In that case, Federal Circuit addressed the Payment in Lieu of Tax Act (“PILT Act”),
31 U.S.C. § 6901 et seq., a statute “enacted to compensate local governments for the loss of tax
revenues resulting from the tax-immune status of federal lands located in their jurisdictions, and
for the cost of providing services related to these lands.” Greenlee Cnty., 487 F.3d at 873
(cleaned up). Greenlee County had not received the amounts due to it under the statute because
Congress had not appropriated sufficient funds. Id. at 874.
According to the version of 31 U.S.C. § 6906 in effect at the time, the PILT Act provided
that the amounts to fund the compensation “are available only as provided in appropriations
law.” Based on that explicit provision, the Federal Circuit upheld a dismissal for a failure to
state a claim because “the government’s liability is capped” under the plain text of the statute.
Greenlee Cnty., 487 F.3d. at 879. The Federal Circuit noted that “[t]he fact that Star-Glo
involved a specific dollar amount while the statute here refers to ‘amounts . . . provided in
appropriation laws’ is a distinction without a difference.” Id. The Federal Circuit, relying on
prior caselaw in which the phrase “subject to the availability of appropriations” had been found
to limit the government’s liability in contract cases, held that there was no functional difference
between such language and the language of the PILT Act. Id. at 878 (citing Cherokee Nation of
Oklahoma v. Leavitt, 543 U.S. 631, 643 (2005); Babbitt v. Oglala Sioux Tribal Public Safety
Dep’t, 194 F.3d 1374, 1380 (Fed. Cir. 1999)). In so doing, the Federal Circuit noted that “‘there
is greater room’ in benefits programs to find the government’s liability limited to the amount
appropriated.” Id. at 879 (quoting Star-Glo, 414 F.3d at 1355).
The Federal Circuit would later reiterate its conclusions from Greenlee County in Prairie
County, another case arising under the PILT Act. The Federal Circuit in Prairie County
summarized that “the question here is whether the statute reflects congressional intent to limit the
government’s liability for PILT payments, or whether PILT imposes a statutory obligation to pay
the full amounts according to the statutory formulas regardless of appropriations by Congress.”
782 F.3d at 690. It answered this question by emphasizing that “[t]he inclusion of the word
‘only’ limits the availability of PILT payments to appropriations.” Id. Congress did not,
however, employ the limiting words “only” or “subject to the availability of appropriations” in
section 9009c.
Greenlee County left open the question of what would happen when sufficient
unrestricted amounts remained available and whether those reprogrammable funds could cover
the obligation. The Federal Circuit did note, however, that “[t]he Supreme Court recently
addressed this issue in Cherokee Nation in the context of a contract case and concluded that the
presence of sufficient unrestricted lump-sum appropriations (not specifically appropriated for the
program in issue) to meet the government’s contractual obligation qualified as available
appropriations.” Greenlee Cnty., 487 F.3d at 880 n.3 (citing Cherokee Nation of Oklahoma,
543 U.S. at 641).
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Compared to those cases, however, the text of the RRF statute is more ambiguous. The
plaintiffs point to the open-ended nature of section 9009c(b)(2)(A) (“In addition to amounts
otherwise available . . . .”), while the defendant points to the specific sum allocated to the RRF
(“[T]here is appropriated to the Restaurant Revitalization Fund for fiscal year 2021, out of any
money in the Treasury not otherwise appropriated, $28,600,000,000, to remain available until
expended . . . .”). Neither party has presented any evidence of legislative history, and none
appears to exist specifically concerning section 9009c(b)(2)(A).
On its face, the plaintiffs have the better argument as to the interpretation of section
9009c. Section 9009c either sets a specific amount of money aside for the RRF or is open-
ended, but it cannot be both. Given that one part of section 9009c(b)(2)(A) is open-ended,
providing that funds are appropriated “[i]n addition to amounts otherwise available,” the entire
provision must be read so as not to set a specific cap on the funds available for the RRF.
The open-ended statutory add-on that Congress allocated to the RRF by allowing the
SBA to spend “amounts otherwise available” in addition to the $28.6 billion it specifically
allocated is crucial. The Supreme Court has explained that “Congress could have expressly
limited an obligation to available appropriations or specific dollar amounts.” Maine Cmty.
Health, 590 U.S. at 313. For the RRF, Congress chose instead to provide a specific sum of
money “[i]n addition to amounts otherwise available.” The formulation Congress used in section
9009c(b)(2)(A) on its face therefore does not express a congressionally mandated limit on the
RRF’s funding to a specific dollar amount. This lack of a specific limitation makes this case
seem closer to Maine Community Health, in which Congress simply never provided the funds
necessary to fulfill the government’s statutory obligations, rather than a case in which Congress
limited the government’s obligations to a specific sum of money, as in Star-Glo.
The RRF statute is also different from the ones previously considered by the Federal
Circuit because section 9009c lacks phrases like “available only as provided in appropriations
laws” or “subject to the availability of appropriations.” These were the phrases the Federal
Circuit found in Greenlee County to reflect a cap. While section 9009c, like the statute in Star-
Glo, does use the phrase “to remain available until expended,” as noted above, that case is
distinguishable because of the RRF’s open-ended appropriations provision and the lack of any
relevant legislative history of the kind the Federal Circuit relied on in Star-Glo.
Applying the factors deemed important by the Federal Circuit in its precedents to the
apparently unprecedented language of the RRF statute leads to the conclusion that section 9009c
does not impose a cap on the defendant’s liability because the statutory text does not demonstrate
Congress’s intent to limit the defendant’s liability to the specific amount appropriated. Rather,
section 9009c(b)(2)(A) demonstrates that Congress provided a minimum sum of money for the
RRF, while also allowing other, unspecified, additional amounts to be used.
Admittedly, the Federal Circuit has repeatedly noted that “‘there is greater room’ in
benefits programs to find the government’s liability limited to the amount appropriated.”
Greenlee Cnty., 487 F.3d at 879 (quoting Star-Glo, 414 F.3d at 1355); Prairie Cnty., 782 F.3d at
689 (same). This statement by the Federal Circuit, however, is little more than dicta, as these
cases do not purport to establish a controlling interpretive cannon of construction for benefits-
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Case 1:23-cv-01876-RAH Document 18 Filed 07/24/24 Page 32 of 33
granting statutes. Regardless, “greater room” cannot read into the RRF statute a limitation on the
defendant’s liability that does not exist. Instead, it is the statutory language itself, not a general
principle, that must control. Read together, the statute’s appropriation of a specific sum of
money and its provision of an additional unlimited “amounts otherwise available” produce a
conclusion that section 9009c(b)(2)(A) does not limit the government’s liability to a specific sum
of money.
While Congress did not limit the defendant’s liability, that conclusion does not mean that
the defendant’s liability for the RRF is completely uncapped. 12 Section 9009c(b)(3) only
requires expenditure of funds in the RRF. This limitation de facto creates a cap on the
government’s liability because, as previously noted, the payment obligation of section 9009c
only flows to money in the RRF. The practical effect is that any claims for damages must be
limited to a claim that a plaintiff was entitled to receive funds that were at one point in the RRF
but were misspent, even if additional sums could have been added to it by the “amounts
otherwise available” provision. There is no indication, however, that Congress intended section
9009c(b)(2)(A) to be a de jure cap on spending for the RRF that would limit the defendant’s
liability under Federal Circuit precedent. Whether a statute is money-mandating and whether a
plaintiff falls within the class as to whom the statute is money-mandating present separate
questions from whether Congress created a statutory cap on the defendant’s liability; these
distinct questions should not be conflated. In this case, limited to the requirements imposed by
section 9009c, the exhaustion of the funds in the RRF neither deprives this court of jurisdiction
nor prevents the plaintiffs from stating a claim.
Even if there were a cap on the defendant’s liability, “[t]he question [would] remain[ ],
however, as to the effect of the cap.” Star-Glo, 414 F.3d at 1355. In the relevant Federal Circuit
precedents, the plaintiffs were seeking damages under the Tucker Act because Congress had
failed to appropriate sufficient funds to pay the full amounts of its outstanding obligations; there
was no question as to whether the government had made improper payments to undeserving
applicants in violation of federal law. The plaintiffs here, however, claim there would have been
sufficient funding available to pay them had the SBA not misinterpreted the statute and made
award to the wrong applicants, contrary to Congress’s express command in section 9009c(c)(1).
This difference is key. The plaintiffs argue that Congress directed the SBA to provide
grants to one group of businesses, and the SBA instead awarded them to a different group. The
defendant cannot evade its obligations by paying the wrong entities out of the RRF and then
claiming there is no money left to pay the plaintiffs, the text of the statute notwithstanding. The
plaintiffs therefore do not seek to use the Judgment Fund to circumvent Congress’s failure to
fund the RRF with sufficient funds to cover all applications. Instead, they seek to be
compensated for the failure to pay them funds they contend should have been awarded to them in
12
Although the plaintiffs have argued that section 9009c(b)(2)(A) is not a cap on the
defendant’s liability, even they have not argued that section 9009c is an uncapped liability that
required the government to make grants to all applicants. In other words, even the plaintiffs
agree there exists some limit on the expenditures the SBA had to make under the RRF.
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Case 1:23-cv-01876-RAH Document 18 Filed 07/24/24 Page 33 of 33
the first place rather than to other applicants. In short, the plaintiffs seek to effectuate Congress’s
intent from the plain text of section 9009c, contrary to the SBA’s administration of the law,
which contravened that express intent.
Existing caselaw does not extend to this scenario, and it appears to be a question of first
impression. In the absence of caselaw holding that a plaintiff cannot state a claim under these
circumstances, there is no reason to extend a doctrine here when it would frustrate Congress’s
intent to compensate the plaintiffs for their pandemic-related loss because of the SBA’s
misinterpretation of section 9009c(c)(1). Instead, it makes sense to effectuate Congress’s intent
that the plaintiffs receive such money by allowing them to recover money damages.
No funding cap exists in section 9009c to limit the defendant’s liability for the allegedly
illegal actions of the SBA. The plaintiffs’ claims may proceed to the merits.
IV. CONCLUSION
The plaintiffs have stated a claim within the jurisdiction of this court and have stated a
claim on which relief can be granted. Accordingly, the defendant’s motion to dismiss (ECF 7) is
denied. A separate order reflecting this outcome is being filed concurrently with this opinion.
s/ Richard A. Hertling
Richard A. Hertling
Judge
33
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Case 1:23-cv-01876-RAH Document 19 Filed 07/24/24 Page 1 of 1
In the United States Court of Federal Claims
No. 23-1876C
Filed: July 24, 2024
112 GENESEE STREET, LLC, et al,
Plaintiffs,
v.
UNITED STATES,
Defendant.
ORDER
For the reasons provided in the memorandum opinion filed concurrently with this order,
the defendant’s motion to dismiss (ECF 7) is DENIED. In consultation with the parties, the
Court will schedule an in-person status conference to review further proceedings.
It is so ORDERED.
s/ Richard A. Hertling
Richard A. Hertling
Judge
Appx34
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