Defendant's Motion to Dismiss — 112 Genesee Street, LLC v. The United States (Court of Federal Claims)

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Defendant's Motion to Dismiss, filed February 26, 2024 as Document 7 by the United States in No. 23-1876C in the United States Court of Federal Claims before Judge Richard Hertling. Under Rule 12(b)(1), the government asks the Court to dismiss the complaint for lack of subject-matter jurisdiction. The plaintiffs are 303 restaurant businesses, with 112 Genesee Street, LLC named first in the caption, that applied for Restaurant Revitalization Fund grants but did not receive funds. The motion argues that the plaintiffs lack standing and that the claims are moot because the Fiscal Responsibility Act rescinded unobligated funds and the covered period expired on March 11, 2023. It also argues that section 5003 is not money-mandating, that the Court cannot hear arbitrary-and-capricious or negligence claims, and that transfer to a district court would be futile.

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Case 1:23-cv-01876-RAH Document 7 Filed 02/26/24 Page 1 of 30

No. 23-1876C
(Judge Richard Hertling)

IN THE UNITED STATES COURT OF FEDERAL CLAIMS

112 GENESEE STREET, LLC, et al.,
Plaintiffs,

THE UNITED STATES,
Defendant.

DEFENDANT’S MOTION TO DISMISS

BRIAN M. BOYNTON
Principial Deputy Assistant Attorney General

PATRICIA M. McCARTHY
Director

WILLIAM J. GRIMALDI
Assistant Director

REBECCA S. KRUSER
Senior Trial Counsel
Commercial Litigation Branch
Civil Division
Department of Justice
P.O. Box 480
Ben Franklin Station
Washington, D.C. 20044
Tele: (202) 305-2035
Rebecca.s.kruser@usdoj.gov

February 26, 2024 Attorneys for Defendant
Case 1:23-cv-01876-RAH Document 7 Filed 02/26/24 Page 2 of 30

TABLE OF CONTENTS

TABLE OF CONTENTS................................................................................................................. i

TABLE OF AUTHORITIES .......................................................................................................... ii

DEFENDANT’S MOTION TO DISMISS ..................................................................................... 1

INTRODUCTION .......................................................................................................................... 1

STATEMENT OF THE ISSUE ...................................................................................................... 4

STATEMENT OF THE FACTS .................................................................................................... 4

SUMMRAY OF THE ARGUMENT ............................................................................................. 6

ARGUMENT .................................................................................................................................. 6

I. Standard Of Review ................................................................................................ 6

II. The Court Should Dismiss The Case Because Plaintiffs Lack
Standing .................................................................................................................. 7

III. The Court Should Dismiss The Case Because Plaintiffs’ Claims Are Moot .......... 9

IV. The Court Does Not Possess Subject-Matter Jurisdiction Because Section 5003
Of ARPA Is Not Money-Mandating ..................................................................... 12

V. The Court Does Not Possess Subject-Matter Jurisdiction Over Claims That A
Government Agency Acted Arbitrarily And Capriciously ................................... 15

VI. The Court Does Not Possess Subject-Matter Jurisdiction Over Negligence
Claims ................................................................................................................... 21

VII. Transfer To A District Court Would Be Futile ..................................................... 21

CONCLUSION ............................................................................................................................. 22

i
Case 1:23-cv-01876-RAH Document 7 Filed 02/26/24 Page 3 of 30

TABLE OF AUTHORITIES

CASES

Alder Terrace, Inc. v. United States,
161 F.3d 1372 (Fed. Cir. 1998)................................................................................................... 7

Allgenesis Biotherapeutics Inc. v. Cloudbreak Therapeutics, LLC,
85 F.4th 1377 (Fed. Cir. 2023) ................................................................................................... 8

Anderson v. United States,
344 F.3d 1343 (Fed. Cir. 2003)................................................................................................... 7

Banerjee v. United States,
77 Fed. Cl. 522 (2007) .............................................................................................................. 16

Blessed Cajuns LLC v. Guzman,
No. 4:21-677 (N.D. Tex. May 28, 2021) .................................................................................... 2

Bowen v. Massachusetts,
487 U.S. 879 (1988) ............................................................................................................ 17, 19

Braun v. United States,
144 Fed. Cl. 560 (2019) ............................................................................................................ 16

Cottrell v. United States,
42 Fed. Cl. 144 (1998) .............................................................................................................. 21

Crocker v. United States,
125 F.3d 1475 (Fed. Cir. 1997)................................................................................................. 16

Dancy v. United States,
229 Ct. Cl. 300 (1982) .............................................................................................................. 22

DeFunis v. Odegaard,
416 U.S. 312 (1974) .................................................................................................................. 10

Dow Jones & Co., Inc. v. Ablaise Ltd.,
606 F.3d 1338 (Fed. Cir. 2010)................................................................................................... 6

Eastport S. S. Corp. v. United States,
372 F.2d 1002 (Ct. Cl. 1967) .................................................................................................... 12

Fisher v. United States,
402 F.3d 1167 (Fed. Cir. 2005)....................................................................................... 7, 12, 17

ii
Case 1:23-cv-01876-RAH Document 7 Filed 02/26/24 Page 4 of 30

Gilham v. United States,
164 Fed. Cl. 1 (2023), aff'd, No. 2023-1507, 2023 WL 5814413 (Fed. Cir. Sept. 8, 2023) ..... 16

Greer’s Ranch Café v. Guzman,
540 F. Supp. 3d 638 (N.D. Tex. 2021) ....................................................................................... 2

Harlem Globetrotters Int’l, Inc. v. United States,
168 Fed. Cl. 31 (2023) .............................................................................................................. 16

Infidels, LLC v. Guzman,
No. 3:22-391, 2023 WL 5599605 (M.D. Tenn. Aug. 29, 2023) ........................................... 9, 22

Katz v. Cisneros,
16 F.3d 1204 (Fed. Cir. 1994)............................................................................................. 17, 18

Keener v. United States,
No. 2:22-1640, 2023 WL 2478367 (D.S.C. Mar. 13, 2023) ........................................... 9, 11, 22

Kingsley Restaurants, Inc. v. United States Small Bus. Admin.,
No. 1:21-CV-2314-SCJ, 2021 WL 8441778 (N.D. Ga. Aug. 24, 2021) .......................... 2, 9, 22

Liner v. Jafco, Inc.,
375 U.S. 301 (1964) .................................................................................................................. 10

Lion Raisins, Inc. v. United States,
416 F.3d 1356 (Fed. Cir. 2005)................................................................................................. 16

Little River Lumber Co. v. United States,
7 Cl. Ct. 492 (1985) .................................................................................................................. 22

Livingston v. Derwinski,
959 F.2d 224 (Fed. Cir. 1992)................................................................................................... 17

Lujan v. Defs. of Wildlife,
504 U.S. 555 (1992) .................................................................................................................... 8

Martinez v. United States,
333 F.3d 1295 (Fed. Cir. 2003)................................................................................................. 16

MC Mgmt. of Rochester LLC v. Biden,
No. 6:22-6337, 2023 WL 4194771 (W.D.N.Y. June 27, 2023) ........................................... 9, 22

McCarthy v. United States,
No. 21-2272, 2022 WL 17078026 (Fed. Cl. Nov. 18, 2022) .................................................... 16

iii
Case 1:23-cv-01876-RAH Document 7 Filed 02/26/24 Page 5 of 30

McNabb v. United States,
54 Fed. Cl. 759 (2002) .............................................................................................................. 17

Me. Cmty. Health Options v. United States,
140 S. Ct. 1308 (2020) .............................................................................................................. 14

Milwaukee Police Ass’n v. Bd. of Fire & Police Comm'rs of the City of Milwaukee,
708 F.3d 921 (7th Cir. 2013)……………………………………………………………...9

Momenta Pharms., Inc. v. Bristol-Myers Squibb Co.,
915 F.3d 764, 770 (Fed. Cir. 2019)……………………………………………………………..9

Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co.,
463 U.S. 29 (1983) .................................................................................................................... 16

Murphy v. United States,
993 F.2d 871 (Fed. Cir. 1993)................................................................................................... 16

Murphy v. United States,
No. 21-1422, 2022 WL 2187680 (Fed. Cl. June 16, 2022) ...................................................... 16

Nat’l Corn Growers Ass’n v. Baker,
840 F.2d 1547 (Fed. Cir. 1988)................................................................................................. 17

Perri v. United States,
340 F.3d 1337 (Fed. Cir. 2003)................................................................................................. 12

Portland Mint v. United States,
160 Fed. Cl. 642 (2022) ............................................................................................................ 16

Reboot Macon, LLC v. United States,
No. 5:21-221, 2023 WL 4672395 (M.D. Ga. July 20, 2023).............................................. 11, 22

Rick’s Mushroom Serv., Inc. v. United States,
521 F.3d 1338 (Fed. Cir. 2008)................................................................................................. 21

Russell v. United States,
78 Fed. Cl. 281 (2007) .............................................................................................................. 17

Samish Indian Nation v. United States,
419 F.3d 1355 (Fed. Cir. 2005)................................................................................................. 12

Schneiter v. United States,
159 Fed. Cl. 356 (2022) ............................................................................................................ 16

Shearin v. United States,
992 F.2d 1195 (Fed. Cir. 1993)................................................................................................. 21
iv
Case 1:23-cv-01876-RAH Document 7 Filed 02/26/24 Page 6 of 30

Starr Int’l Co., Inc. v. United States,
856 F.3d 953 (Fed. Cir. 2017)..................................................................................................... 7

Steel Co. v. Citizens for a Better Env’t,
523 U.S. 83 (1998) ...................................................................................................................... 7

Stone v. United States,
152 Fed. Cl. 649 (2021) ............................................................................................................ 16

Stroughter v. United States,
89 Fed. Cl. 755 (2009) .............................................................................................................. 17

Superior Waste Mgmt. LLC v. United States,
--- Fed. Cl. ---, 2024 WL 101866 (2024) .................................................................................... 7

Tellabs, Inc. v. Makor Issues & Rts., Ltd.,
551 U.S. 308 (2007) .................................................................................................................... 3

TransUnion LLC v. Ramirez,
594 U.S. 413 (2021) .................................................................................................................... 8

United States v. Mitchell,
445 U.S. 535 (1980) .................................................................................................................... 7

United States v. Testan,
424 U.S. 392 (1976) .............................................................................................................. 7, 12

Uzuegbunam v. Preczewski,
141 S. Ct. 792 (2021) ................................................................................................................ 10

Vitolo v. Guzman,
999 F.3d 353 (6th Cir. 2021) ................................................................................................ 2, 13

Wopsock v. Natchees,
454 F.3d 1327 (Fed. Cir. 2006)................................................................................................. 16

STATUTES

5 U.S.C. § 702 ............................................................................................................................... 13

5 U.S.C. § 706(2)(A)..................................................................................................................... 12

5 U.S.C. § 706(2)(C) ..................................................................................................................... 12

5 U.S.C. § 706(2)(D)..................................................................................................................... 12

v
Case 1:23-cv-01876-RAH Document 7 Filed 02/26/24 Page 7 of 30

5 U.S.C. §§ 701-706 ..................................................................................................................... 12

15 U.S.C. § 9009(b)(3) ................................................................................................................. 20

15 U.S.C. § 9009c(a)(3) ................................................................................................................ 10

15 U.S.C. § 9009c(a)(3)(B)......................................................................................................... 2, 3

15 U.S.C. § 9009c(a)(4) .................................................................................................................. 2

15 U.S.C. § 9009c(b)(1)-(2)(A) ...................................................................................................... 1

15 U.S.C. § 9009c(b)(2)(A) .......................................................................................................... 11

15 U.S.C. § 9009(c) ........................................................................................................................ 1

15 U.S.C. § 9009c(c)(1) ............................................................................................................ 2, 19

15 U.S.C. § 9009c(c)(3)(A) ............................................................................................................ 2

15 U.S.C. § 9009c(c)(5) ............................................................................................................ 2, 10

15 U.S.C. § 9009c(c)(6) ...................................................................................................... 2, 10, 11

28 U.S.C. § 1346(b)(1) ................................................................................................................. 17

28 U.S.C. § 1491 ......................................................................................................................... 6, 7

28 U.S.C. § 1491(a) ...................................................................................................................... 17

28 U.S.C. § 1631 ........................................................................................................................... 21

28 U.S.C. § 2671 ........................................................................................................................... 17

Pub. L. No. 117-2, 135 Stat. 4 (March 11, 2021) ....................................................................... 1, 3

Pub. L. No. 118-5, 137 Stat. 10 (June 3, 2023) ........................................................................ 3, 11

RULES

Rule 12(b) ....................................................................................................................................... 1

vi
Case 1:23-cv-01876-RAH Document 7 Filed 02/26/24 Page 8 of 30

IN THE UNITED STATES COURT OF FEDERAL CLAIMS

112 GENESEE STREET, LLC, et al., )
)
Plaintiffs, )
)
v. ) No. 23-1876C
) Judge Richard Hertling
THE UNITED STATES, )
)
Defendant. )

DEFENDANT’S MOTION TO DISMISS

Pursuant to Rule 12(b)(1) of the Rules of the United States Court of Federal Claims

(RCFC), defendant, the United States, respectfully requests that the Court dismiss the complaint

filed by plaintiffs, 303 businesses in the restaurant industry, for lack of subject-matter

jurisdiction. The Court does not possess jurisdiction to entertain plaintiffs’ claims for numerous

reasons.

INTRODUCTION

This case concerns the Restaurant Revitalization Fund (RRF), a fund created by Congress

and overseen by the Small Business Administration (SBA) to help restaurants recover from

losing revenue due to the COVID-19 pandemic. Congress enacted the American Rescue Plan

Act of 2021 (ARPA), Pub. L. No. 117-2, 135 Stat. 4 (2021), on March 11, 2021. Section 5003 of

ARPA (later codified at 15 U.S.C. § 9009c) created the RRF and appropriated $28.6 billion to be

awarded as grants by the SBA to eligible entities.1 15 U.S.C. § 9009c(b)(1)-(2)(A). Congress

also set various eligibility criteria for recipients, restricted the potential uses for awards, and

1
Although the statute that forms the basis for this complaint is now codified at 15 U.S.C.
§ 9009c, plaintiffs refer to it as section 5003 of the American Rescue Plan Act throughout their
complaint. To avoid confusion, we will use the same terminology, but cite to the current
codification.
Case 1:23-cv-01876-RAH Document 7 Filed 02/26/24 Page 9 of 30

required recipients to use their awards “[d]uring [a] covered period” ending no later than March

11, 2023. Id. § 9009c(c)(5); see id. § 9009c(a)(3)(B) & (a)(4). If a recipient failed to use its

entire award before the covered period ended, Congress required the recipient to return any

unused funds to the Treasury. See id. § 9009c(c)(6).

Congress also required SBA to “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” – a term defined by statute – for the first twenty-one days. Id. § 9009c(c)(3)(A).2 The

statute stated that except as provided in the creation of the priority program, SBA “shall award

grants to eligible entities in the order in which applications [we]re received by the

Administrator.” Id. § 9009c(c)(1).

SBA accepted RRF applications through an online portal from May 3 to May 24, 2021.3

See Compl. at ¶¶ 53-58. At the end of June 2021, SBA stopped processing RRF applications

because all funds available for awards had been disbursed. Id. at ¶¶ 67, 75. Later, in November

2022, approximately $83 million had become available for new RRF awards. Id. at ¶ 69. SBA

awarded this money to applications that had been fully processed as of June 30, 2021. Id.

2
A divided motions panel of the U.S. Court of Appeals for the Sixth Circuit later concluded
that this twenty-one-day priority for small business concerns owned and controlled by women
and for socially and economically disadvantaged small business concerns 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
SBA decided to stop accepting applications on May 24, 2021 due to “overwhelming
demand” that “rapidly dwarfed the allocation of funds set aside by Congress . . . .” 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).
2
Case 1:23-cv-01876-RAH Document 7 Filed 02/26/24 Page 10 of 30

On March 11, 2023, the covered period expired. See 15 U.S.C. § 9009c(a)(3)(B) (giving

the SBA’s Administrator authority to extend the covered period up to March 11, 2023); Press

Release No. 21-33 (Apr. 27, 2021), https://perma.cc/2XUG-4ZXL (exercising that authority).4

At that point, the statute required recipients to return any unused funds to the Treasury.

The story of the RRF ended with the Fiscal Responsibility Act, which became law on

June 3, 2023. 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.”).

Despite the completion of the covered period and the rescinding of unobligated funds,

plaintiffs come before this Court seeking to receive payments by the Government that equal the

RRF grants that they applied for but did not receive. Compl. at ¶ 153. Plaintiffs proceed on the

theory that they would have received RRF grants but-for various alleged errors, negligent

conduct, and arbitrary and capricious acts and omissions on the part of SBA. Id. at ¶¶ 143, 149.

However, plaintiffs’ artful and lengthy pleading, with its invocation of an alleged money-

mandating statute and demand for money-damages, cannot alter the fact that they challenge

SBA’s administration of the RRF program. Such a claim can only be brought in district court –

or it could have been, if plaintiffs did not lack standing and the case were not moot due to the

completion and roll-up of the RRF program. These compounded problems are fatal to this

Court’s jurisdiction.

4
The Court may take judicial notice of factual information available on government websites.
See Tellabs, Inc. v. Makor Issues & Rts., Ltd., 551 U.S. 308, 322-23 (2007).
3
Case 1:23-cv-01876-RAH Document 7 Filed 02/26/24 Page 11 of 30

STATEMENT OF THE ISSUE

1. Whether the Court does not possess jurisdiction to entertain plaintiffs’ complaint

because plaintiffs lack standing.

2. Whether the Court does not possess jurisdiction to entertain plaintiffs’ complaint

because the case is moot.

3. Whether the Court does not possess jurisdiction to entertain plaintiffs’ complaint

because section 5003 of ARPA is not money-mandating.

4. Whether the Court does not possess jurisdiction to entertain plaintiffs’ complaint

because it is well-established that the Court cannot hear cases based on claims of arbitrary and

capricious agency actions or negligence.

STATEMENT OF FACTS

Plaintiffs are 303 businesses in the restaurant industry. Id. at ¶ 13. Plaintiffs allege that

they applied for RRF grants on the first day that SBA’s online portal opened for applications and

submitted complete and eligible applications. Id. at ¶¶ 4, 131-132. However, plaintiffs did not

receive RRF funds. Id. at ¶¶ 9, 83, 135, 149.

In essence, plaintiffs set forth a variety of alleged errors by SBA in its administration of

the RRF program and claim that if the SBA had acted differently, they would have received RRF

funds because they were amongst the first applicants. Id. at ¶143. Plaintiffs particularly focus

on the idea that SBA was required to award grants in the order that applications were received,

yet instead awarded grants in the order that applications were processed and approved. Id. at ¶¶

8, 46(a), 73-76, 79, 82, 84, 91. Relatedly, plaintiffs allege that SBA failed to treat priority and

non-priority applicants on equal footing after Federal courts found the program’s prioritization

scheme to be unconstitutional when it did not award grants in the order applications were

4
Case 1:23-cv-01876-RAH Document 7 Filed 02/26/24 Page 12 of 30

received, regardless of priority status. Id. at ¶ 80. In plaintiffs’ view, SBA’s method of awarding

grants “misallocated” funds to businesses that applied later in time than them. Id. at ¶¶ 83, 128,

135-136, 140-142, 148-152.

Plaintiffs also raise a large number of other alleged SBA errors. Plaintiffs claim that the

SBA did not have sufficient pre-award controls to stop fraud or verify applicants’ gross receipts,

id. at ¶¶ 84-92, did not properly review applications and resolve issues, id. at ¶¶ 95-98, did not

manage the online portal properly, id. at ¶¶ 99-101, failed to take reasonable measures to detect

fraud, id. at ¶¶ 102-105, unlawfully applied program procedures, id. at ¶¶ 106-110, did not

perform an assessment of the effectiveness of its pre-award controls, id. at ¶¶ 111-115, failed to

enforce reporting requirements, id. at ¶¶ 116-119, failed to act to recover fraudulent, misused, or

unused funds, id. at ¶¶ 120-123, incorrectly implemented payment processing, id. at ¶¶ 124-126,

and did not perform an estimate of misallocated funds, id. at 127. Again, plaintiffs assert that

these issues caused the SBA to “misallocate” some amount of the program funds towards

undeserving or fraudulent parties, rather than award grants to plaintiffs. Id. at ¶¶ 128, 135-136.

Plaintiffs also allege instances in which the SBA applied its rules too strictly and excluded

plaintiffs’ applications from being considered and funded. See id. at ¶ 77.

Plaintiffs claim that section 5003 of ARPA is money-mandating. Id. at ¶¶ 31-34.

Plaintiffs assert that SBA violated section 5003. However, plaintiffs describe the alleged

statutory violation as SBA’s actions in “awarding grants to entities whose applications were

received after applications submitted by eligible entities whose grants were not awarded due to

SBA errors and purported exhaustion of funds.” Id. at ¶ 35. Thus, although facially tied to a

claim of a violation of an alleged money-mandating statute, the complaint focuses on the alleged

SBA errors described above and declares that SBA acted unlawfully, negligently, and arbitrarily

5
Case 1:23-cv-01876-RAH Document 7 Filed 02/26/24 Page 13 of 30

and capriciously in administering the RRF program. Plaintiffs demand at least $252,669,378.20,

plus costs, fees, and interest. Id. at Prayer for Relief.

SUMMARY OF THE ARGUMENT

Plaintiffs’ complaint presents a comprehensive and detailed review of the importance of

the restaurant industry, the impact of the COVID-19 pandemic on this industry, and the

establishment and operation of the RRF program. Plaintiffs then set forth a catalogue of alleged

errors, problems, and failures on the part of SBA in its administration of the RRF program.

Despite the confidence with which plaintiffs assert that section 5003 of ARPA is money-

mandating and that they are collectively entitled to a substantial amount of money damages, the

claims that they put forth and theories that they use are not within this Court’s limited

jurisdiction. The text of the statute does not contain any mandate for Government payment, but

only sets forth a method of application administration. And it is well-established that this Court

cannot redress general claims of an agency’s mismanagement of a statutory program.

Furthermore, even before the substance of the complaint is considered, plaintiffs’ case cannot

succeed because they lack standing and the matter is moot. For this reason, transfer to district

court would be futile. The Court should dismiss the complaint for lack of subject matter

jurisdiction.

ARGUMENT

I. Standard Of Review

Subject matter jurisdiction is a threshold requirement that must be determined at the

outset of a case. Dow Jones & Co., Inc. v. Ablaise Ltd., 606 F.3d 1338, 1348 (Fed. Cir. 2010).

The jurisdiction of the United States Court of Federal Claims is established and limited by the

Tucker Act. See 28 U.S.C. § 1491. The Tucker Act is a waiver of sovereign immunity, and it

6
Case 1:23-cv-01876-RAH Document 7 Filed 02/26/24 Page 14 of 30

must be strictly construed. See United States v. Mitchell, 445 U.S. 535, 538 (1980).

The Tucker Act grants the Court “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.” 28 U.S.C. § 1491. The

Tucker Act, however, is merely “a jurisdictional statute; it does not create any substantive right

enforceable against the United States for money damages . . . the Act merely confers jurisdiction

upon it whenever the substantive right exists.” United States v. Testan, 424 U.S. 392, 398

(1976). Thus, “a plaintiff must identify a separate source of substantive law that creates the right

to money damages.” Fisher v. United States, 402 F.3d 1167, 1172 (Fed. Cir. 2005) (en banc). If

this Court’s subject matter jurisdiction is challenged, the non-moving party must establish that

this Court has jurisdiction over the dispute. See Alder Terrace, Inc. v. United States, 161 F.3d

1372, 1377 (Fed. Cir. 1998).

II. The Court Should Dismiss The Case Because Plaintiffs Lack Standing

As a preliminary matter, the Court should dismiss this case because plaintiffs lack

standing. Article III of the Constitution limits the exercise of the judicial power to “Cases” and

“Controversies.” § 2, cl. 1. The Court of Federal Claims, “though an Article I court, applies the

same standing requirements enforced by other federal courts created under Article III.” Starr

Int’l Co., Inc. v. United States, 856 F.3d 953, 964 (Fed. Cir. 2017) (quoting Anderson v. United

States, 344 F.3d 1343, 1350 n.1 (Fed. Cir. 2003)) (internal quotation marks omitted). Standing is

a jurisdictional issue. Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 102-04 (1998). Like

other Article III requirements, standing is most accurately characterized as a prerequisite to

subject matter jurisdiction. See Superior Waste Mgmt. LLC v. United States, --- Fed. Cl. ---,

7
Case 1:23-cv-01876-RAH Document 7 Filed 02/26/24 Page 15 of 30

2024 WL 101866 at *4 (2024) (collecting cases).

“To establish a case or controversy, a party invoking federal jurisdiction must meet the

‘irreducible constitutional minimum of standing.’” Allgenesis Biotherapeutics Inc. v.

Cloudbreak Therapeutics, LLC, 85 F.4th 1377, 1380 (Fed. Cir. 2023) (quoting Lujan v. Defs. of

Wildlife, 504 U.S. 555, 560 (1992)). To demonstrate standing, a plaintiff must show: (i) that he

suffered an injury in fact that is concrete, particularized, and actual or imminent; (ii) that the

injury was likely caused by the defendant; and (iii) that the injury would likely be redressed by

judicial relief. Lujan, 504 U.S. at 560-561. A plaintiff therefore must claim to have suffered an

injury that the defendant caused and that the court can remedy. See TransUnion LLC v. Ramirez,

594 U.S. 413, 423 (2021). These requirements are essential because:

[u]nder Article III, federal courts do not adjudicate hypothetical or
abstract disputes. Federal courts do not possess a roving
commission to publicly opine on every legal question. Federal
courts do not exercise general legal oversight of the Legislative
and Executive Branches, or of private entities. And federal courts
do not issue advisory opinions.

Id. Although plaintiffs seek to have this Court opine on the quality of SBA’s administration of

the RRF program, there is no live case or controversy here. Even assuming arguendo that

plaintiffs meet the first two criteria in Lujan, any alleged injury cannot be redressed by the Court

because the RRF program no longer has any funding to award grants.

Plaintiffs speculate that there is or could be money available that could presumably be

distributed to them, alleging that “[a]s of June 2022, approximately $180 million of RRF funding

remained without recorded obligations, including $24 million set aside for litigation” and “[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.” Compl. at ¶¶ 68, 70. However, this does not provide a basis for standing.

8
Case 1:23-cv-01876-RAH Document 7 Filed 02/26/24 Page 16 of 30

In fact, district courts dealing with the speculation that the RRF has money available have

already ruled against the plaintiffs on this issue. See Infidels, LLC v. Guzman, No. 3:22-391,

2023 WL 5599605, at *3 (M.D. Tenn. Aug. 29, 2023); MC Mgmt. of Rochester LLC v. Biden,

No. 6:22-6337, 2023 WL 4194771, at *4 (W.D.N.Y. June 27, 2023); Kingsley Rests., Inc. v.

United States Small Bus. Admin., No. 1:21-2314, 2021 WL 8441778, at *3 (N.D. Ga. Aug. 24,

2021) (unreported); cf. Keener v. United States, No. 2:22-1640, 2023 WL 2478367, at *6 (D.S.C.

Mar. 13, 2023). For example, a district court held that a plaintiff’s “offhand suggestion that the

RRF may obtain more funding in the future through either audits or future Congressional

allocations [] fails to establish the existence of a live case or controversy” and noted that “the

SBA did not voluntarily cease processing RRF applications – the Fund simply ran out of money

to allocate.” Kingsley Rests., Inc., 2021 WL 8441778, at *3. As that court concluded, “[t]hat the

RRF may be refunded is entirely speculative,” and unsuccessful RRF applicants cannot presume

otherwise to obtain standing. Id. Similarly, a different district court held that the plaintiffs had

not satisfied “the most basic threshold burden” of standing when they brought their claim for

declaratory relief after the completion of the priority period and after all of the appropriated

funds had been distributed. Infidels, LLC, 2023 WL 5599605, at *3 (M.D. Tenn. Aug. 29, 2023).

This Court should reach the same conclusion, and likewise dismiss this case.

III. The Court Should Dismiss The Case Because Plaintiffs’ Claims Are Moot

Alternatively, even if plaintiffs’ claim was redressable at the time they filed their

complaint, the Court should also dismiss because plaintiffs’ claims are moot. See Momenta

Pharms., Inc. v. Bristol-Myers Squibb Co., 915 F.3d 764, 770 (Fed. Cir. 2019) (“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

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throughout its existence (mootness).’”) (quoting Milwaukee Police Ass’n v. Bd. of Fire & Police

Comm'rs of the City of Milwaukee, 708 F.3d 921, 929–30 (7th Cir. 2013)). “The inability of the

federal judiciary ‘to review moot cases derives from the requirement of Art. III of the

Constitution under which the exercise of judicial power depends upon the existence of a case or

controversy.’” DeFunis v. Odegaard, 416 U.S. 312, 316 (1974) (quoting Liner v. Jafco, Inc.,

375 U.S. 301, 306 n. 3 (1964)). As stated above, to demonstrate standing, a plaintiff “must not

only establish an injury that is fairly traceable to the challenged conduct but must also seek a

remedy that redresses that injury.” Uzuegbunam v. Preczewski, 141 S. Ct. 792, 796 (2021).

“And if in the course of litigation a court finds that it can no longer provide a plaintiff with any

effectual relief, the case generally is moot.” Id.

Here, two events make it impossible for the Court to grant meaningful relief: the

expiration of the RRF’s statutory covered period and the passage of the Fiscal Responsibility

Act. In essence, no matter what the Court orders, no additional funds remain available for new

awards, and even if there were, any awardee receiving such funds would be required to

immediately return these funds to the Treasury.

First, with regard to the covered period, section 5003 of ARPA required that all RRF

awards be “use[d]” during the statutory “covered period,” which began on February 15, 2020,

and expired on December 31, 2021, but could be extended to, but no further than, March 11,

2023, at the discretion of the SBA’s Administrator. 15 U.S.C. § 9009c(a)(3); 15 U.S.C. §

9009c(c)(5). The SBA’s Administrator did subsequently extend the covered period to March 11,

2023. See Press Release No. 21-33 (Apr. 27, 2021), https://perma.cc/2XUG-4ZXL. However,

this date has now obviously passed. Plaintiffs themselves acknowledge the existence of the

covered period. Compl. at ¶ 27(a).

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Importantly, section 5003 required that if an eligible entity failed to use all grant funds or

permanently ceased 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.” 15 U.S.C. §

9009c(c)(6). Now that the covered period is over, even an order directing SBA to award

plaintiffs’ grants could not provide any meaningful relief because they would immediately have

to return the money to the Treasury.

As a district court thus recognized, given “the plain language of the ARPA which says

that any funds not used during the covered period shall be returned to the Treasury,” claims

challenging SBA’s failure to fund an RRF award became non-redressable on March 11, 2023,

when the covered period expired. Reboot Macon, LLC v. United States, No. 5:21-221, 2023 WL

4672395, at *5 (M.D. Ga. July 20, 2023); cf. 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.”). The Reboot Macon court dismissed on mootness grounds and noted

that it could not “tack on a carve out to § 9009c(c)(6)” for cases where SBA “bungled the

processing of the eligible entity’s claims.” Id. That conclusion applies with equal force to these

plaintiffs.

Second, the Fiscal Responsibility Act “permanently rescinded” any “unobligated

balances of” the $28.6 billion “made available by” 15 U.S.C. § 9009c(b)(2)(A). 137 Stat. at 28.

Plaintiffs’ suggestion that RRF funding will increase due to SBA’s audit and recovery efforts and

thus be accessible to them in some way is incorrect. Even if SBA recovers fraudulent awards,

that money no longer remains practically or legally “available.” In short, SBA has no

appropriation authority for new awards, nor could recipients even use an award: any theoretical

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award would have to immediately go back to the Treasury. In addition to plaintiffs’ lack of

standing, the Court should dismiss the complaint as moot.

IV. The Court Does Not Possess Subject-Matter Jurisdiction Because Section 5003 Of
ARPA Is Not Money-Mandating

When a complaint is filed alleging a Tucker Act claim based on a Constitutional

provision, statute, or regulation, the Court must, at the outset, determine whether this source is

money-mandating. Fisher, 402 F.3d at 1173. The absence of a money-mandating source is

“fatal” to the Court’s jurisdiction. Id. Plaintiffs’ complaint contains several bare legal

conclusions that section 5003 of ARPA is money-mandating. See Compl. at ¶¶ 31-35. However,

even if the Court would attempt to consider plaintiffs’ claims as a pure violation of statutory

terms, excluding the allegations of arbitrary and capricious actions and negligence, the text of

section 5003 demonstrates that it is not money-mandating.

“Under Section 1491 what one must always ask is whether the constitutional clause or the

legislation which the claimant cites can fairly be interpreted as mandating compensation by the

Federal Government for the damage sustained.” Eastport S. S. Corp. v. United States, 372 F.2d

1002, 1009 (Ct. Cl. 1967); see also Testan, 424 U.S. at 400. A statute is generally understood to

be money-mandating when the Government does not have any discretion to pay funds once the

requirements of the statute are met. See id. at 1175; Samish Indian Nation v. United States, 419

F.3d 1355, 1364 (Fed. Cir. 2005). However, “[c]ertain discretionary schemes also support

claims within the Court of Federal Claims jurisdiction,” including “statutes: (1) that provide

‘clear standards for paying’ money to recipients; (2) that state the ‘precise amounts’ that must be

paid; or (3) as interpreted, compel payment on satisfaction of certain conditions.” Samish Indian

Nation, 340 F.3d at 1364-65 (quoting Perri v. United States, 340 F.3d 1337, 1342-43 (Fed. Cir.

2003)).

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The only portion of section 5003 of ARPA raised by plaintiffs as money-mandating states

that, except as provided in the provisions creating the priority program, the SBA Administrator

“shall award grants to eligible entities in the order in which applications are received by the

Administrator.” Compl. at ¶¶ 31-35; 15 U.S.C. § 9009c(c)(1). This sentence does not, however,

actually require that SBA pay all eligible applicants and thus cannot be fairly interpreted as

money-mandating. Instead, it only speaks to the method of application administration and

processing of award disbursements. If Congress had intended SBA to award grants after the

priority period to all eligible entities, all eligible entities who applied in the first hour, or all

eligible entities who applied in the first day, it would have said so. Additionally, plaintiffs

themselves focus on SBA’s need to apply pre-award controls and thus Congress could not have

intended SBA to hand out money without an eligibility determination, which would naturally

take longer for some companies than others. 5 Congress chose not to include any “shall pay”

5
We thus do not agree that paying applications in approval order was contrary to statute or
arbitrary and capricious. 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. During initial
RRF operations when SBA faced a deluge of applications, SBA had a choice: either no money
could be disbursed until the first-filed application was processed to approval – even if that
application was so complex and error-ridden that processing took weeks, holding up badly
needed relief in the middle of an unprecedented global pandemic – or SBA could allow later-
filed/earlier-processed applications to be paid before earlier-filed/later-processed applications.
SBA reasonably chose the latter path, which was consistent with the statutory text. Notably,
plaintiffs’ argument is undermined by their criticism of SBA for insufficiently detecting fraud
and other issues that would have made applicants ineligible. By such allegations, plaintiffs
demonstrate their understanding of SBA’s need to review and process applications before
disbursing money.

Furthermore, the phrase “received by” suggests that Congress intended SBA’s eligibility
confirmation to impact payment order. See Receive, Oxford English Dictionary (3d ed. 2009)
(“To admit or accept (a person or thing)”). Additionally, the Sixth Circuit recognized that after
the priority period, “[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.” Vitolo, 999 F.3d at 359
(emphasis added).
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language that creates both a right and a remedy. See Me. Cmty. Health Options v. United States,

140 S. Ct. 1308, 1329 (2020).

Indeed, in a different section, 15 U.S.C. § 9009(b)(3), entitled “Use of Funds,” states that,

“[t]he Administrator shall use amounts in the Fund to make grants described in subsection (c).”

This language also demonstrates that Congress empowered SBA generally to make grants from

the $28.6 billion fund to entities that meet the eligibility criteria. But Congress did not require

SBA to specifically make payments to any applicant. Therefore, nothing in section 5003 can be

fairly interpreted as mandating compensation by the Government.

Although alleging that section 5003 contains mandatory “shall” language, plaintiffs also

confusingly appear to invoke the idea that section 5003 meets the test for a discretionary scheme

that is within this Court’s jurisdiction per Samish Indian Nation, because it “supplies a clear

standard for the payment of money” or requires applicants to satisfy “objective criteria.” Compl.

at ¶ 32. However, the statute states standards and conditions that applicants must meet, but

nothing in its text compels SBA to pay upon receipt of a satisfactory application. There is

nothing unusual about a benefits program requiring applicants to fulfill eligibility criteria, and

the presence in section 5003 of provisions describing these criteria or how the amount of grants

will be calculated does not put any obligation on the Government to pay. Congress therefore did

not create a rare money-mandating obligation. See Me. Cmty. Health Options, 140 S. Ct. at

1331.

The theory pursued by plaintiffs also confirms that section 5003 is not money-mandating.

Plaintiffs do not simply claim that they submitted eligible applications but were not awarded

grants, contrary to a statutory mandate. Instead, they put forth an indirect theory that section

5003 required SBA to award RRF grants in the order that applications were received and that

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Case 1:23-cv-01876-RAH Document 7 Filed 02/26/24 Page 22 of 30

SBA’s decision to award grants instead in the order that applications were processed, along with

other issues, allowed applicants who had applied later in time than plaintiffs, or were ineligible

to receive an RRF award, to receive the money instead. See Compl. at ¶¶ 7, 9, 75, 83, 128, 135,

142-153. Plaintiffs attribute the fact that they did not receive RRF grants to SBA’s alleged

unlawful, arbitrary, capricious, and negligent acts or omissions. See id. This theory is not based

on a direct violation of a money-mandating statutory provision, but instead depends wholly on a

determination by the Court that SBA acted arbitrarily, capriciously, or negligently, which, as we

discuss below, is outside of the Court’s jurisdiction. See id. at ¶ 128.

V. The Court Does Not Possess Subject-Matter Jurisdiction Over Claims That A
Government Agency Acted Arbitrarily And Capriciously

Separate from the problems posed by the doctrines of standing and mootness, the Court

does not possess subject-matter jurisdiction over the substance of plaintiffs’ claims. The crux of

plaintiffs’ complaint is that SBA managed the RRF program in various arbitrary and capricious

ways. According to plaintiffs, SBA’s arbitrary and capricious acts and omissions prevented

them from receiving funding by allowing money to be distributed to other applicants who

submitted applications after plaintiffs. However, these allegations are plainly outside of the

Court’s subject-matter jurisdiction.

Although plaintiffs do not cite or reference the Administrative Procedures Act (APA), 5

U.S.C. §§ 701-706, it is the provisions of this statute that waive sovereign immunity in certain

situations 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,” 5 U.S.C. § 706(2)(A), “in excess of statutory

jurisdiction,” id. § 706(2)(C), or “without observance of procedure required by law[.]” Id.

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§ 706(2)(D); see Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463

U.S. 29, 43 (1983). Plaintiffs’ central allegations, not merely in language but in substance, that

SBA engaged in numerous unlawful and arbitrary and capricious acts and omissions can be

nothing other than an APA claim.6 See Portland Mint v. United States, 160 Fed. Cl. 642, 664

(2022) (citations omitted).

Crucially, and fatally to plaintiffs’ complaint, the Federal Circuit has repeatedly and

expressly held that this Court does not possess jurisdiction over APA claims. See Lion Raisins,

Inc. v. United States, 416 F.3d 1356, 1370 n. 11 (Fed. Cir. 2005); Martinez v. United States, 333

F.3d 1295, 1313 (Fed. Cir. 2003); Crocker v. United States, 125 F.3d 1475, 1476 (Fed. Cir.

1997); Murphy v. United States, 993 F.2d 871, 874 (Fed. Cir. 1993).7 This Court lacks

jurisdiction to decide APA claims because the APA is not money-mandating. See Martinez, 333

F.3d at 1313; see also Harlem Globetrotters Int’l, Inc. v. United States, 168 Fed. Cl. 31, 42

(2023); Banerjee v. United States, 77 Fed. Cl. 522, 534 (2007).

The Federal Circuit has held that “the APA does not authorize an award of money

damages at all; to the contrary, [S]ection 10(a) of the APA, 5 U.S.C. § 702, specifically limits the

Act to actions seeking relief other than money damages.” Wopsock v. Natchees, 454 F.3d 1327,

6
We do not concede that plaintiffs present allegations that merit any relief under the
Administrative Procedures Act (APA). However, the nature of their allegations is most properly
considered an APA claim.
7
Just within the past few years, numerous decisions of the Court of Federal Claims have
properly applied this precedent and dismissed such claims for lack of jurisdiction. See, e.g.,
Gilham v. United States, 164 Fed. Cl. 1, 8-9 (2023), aff’d, No. 2023-1507, 2023 WL 5814413
(Fed. Cir. Sept. 8, 2023); Schneiter v. United States, 159 Fed. Cl. 356, 367 (2022); Portland Mint
v. United States, 160 Fed. Cl. 642, 664 (2022); McCarthy v. United States, No. 21-2272, 2022
WL 17078026, at *4 (Fed. Cl. Nov. 18, 2022); Murphy v. United States, No. 21-1422, 2022 WL
2187680, at *10 (Fed. Cl. June 16, 2022); Stone v. United States, 152 Fed. Cl. 649, 655 (2021);
Braun v. United States, 144 Fed. Cl. 560, 572-73 (2019).
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1333 (Fed. Cir. 2006). Because the APA is not money-mandating, it does not provide a basis for

jurisdiction in this Court under the Tucker Act. See Fisher, 402 F.3d at 1172. It is well-

established that the APA confers jurisdiction for judicial review of agency decisions to the

United States district courts and not the Court of Federal Claims. See Stroughter v. United

States, 89 Fed. Cl. 755, 763 (2009); Russell v. United States, 78 Fed. Cl. 281, 288 (2007);

McNabb v. United States, 54 Fed. Cl. 759, 767 (2002). In addition, “the APA is not a

jurisdictional statute and does not confer jurisdiction on a court not already possessing it.” Nat’l

Corn Growers Ass’n v. Baker, 840 F.2d 1547, 1559 (Fed. Cir. 1988).

Accordingly, plaintiffs cannot shoehorn themselves into the limited jurisdiction of the

Court just by requesting the payment of money, when the nature of their allegations in essence is

an APA claim challenging SBA’s decisions in administering the RRF program. Plaintiffs claim

that SBA’s unlawful, negligent, and/or arbitrary and capricious acts and omissions give rise to

money damages. See Compl. at ¶¶ 10-11, 153. However, regardless of the characterization of

the case by plaintiffs, the Court must “look to the true nature of the action in determining the

existence or not of jurisdiction.” Katz v. Cisneros, 16 F.3d 1204, 1207 (Fed. Cir. 1994) (citing

Livingston v. Derwinski, 959 F.2d 224, 225 (Fed. Cir. 1992)). Simply claiming money damages

attributed to various agency wrongs does not move an APA case into the jurisdiction of the Court

of Federal Claims.

The Supreme Court explained the delineation between the Tucker Act and APA waivers

of sovereign immunity in Bowen v. Massachusetts, 487 U.S. 879 (1988). 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. 879, 885-89

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Case 1:23-cv-01876-RAH Document 7 Filed 02/26/24 Page 25 of 30

(1988). 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.

Here, similarly, plaintiffs are attempting to enforce what they assert is the statutory

mandate for SBA to award grants in the order that applications were received. By extension,

they seek specific relief in the form of the payment of money that they believe that they should

have received under their preferred statutory interpretation. Id. at 901. Any money paid would

not be in compensation for an injury or labor, but would be a byproduct of a determination that

SBA wrongfully and arbitrarily and capriciously administered the RRF program. See Compl. at

¶ 8-11. This is not a claim for “money damages” as required by the Tucker Act.

The Federal Circuit ruling in Katz v. Cisneros, 16 F.3d 1204 (Fed. Cir. 1994) also

confirms that the Court does not possess subject-matter jurisdiction over plaintiffs’ claim. In

Katz, the owner of the company Hollywood Associates Limited Partnership (Hollywood

Associates) appealed an order of a district court transferring his case to the Court of Federal

Claims. Katz, 16 F.3d at 1205. The case involved the Government’s Section 8 housing program.

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Case 1:23-cv-01876-RAH Document 7 Filed 02/26/24 Page 26 of 30

Id. In administering the Section 8 program, the Department of Housing and Urban Development

(HUD) entered into contracts with Public Housing Agencies (PHAs). Id. A PHA would then

enter into contracts with private developers to rehabilitate housing and provide rental units. Id.

These contracts contained provisions for the amount of contract rent paid by the PHA to the

developer on the tenants’ behalf. Id. Contract rent was determined by HUD regulations and was

“based on the project owner’s costs of acquiring, owning, managing and maintaining the

rehabilitated units.” Id.

Hollywood Associates entered into such a contract and calculated the rent based on the

interest rate of 9.25 percent received from its lender, plus costs, points, and other fees that it had

to pay to obtain this rate. Id. at 1206. In the course of an audit performed by HUD, HUD

determined that the contract rents being paid to Hollywood Associates were too high and should

be based on the 9.25 percent interest rate only, without add-ons. Id. HUD ordered Hollywood

Associates to reduce rents and recover overpayments. Id. Hollywood Associates challenged

HUD’s interpretation of its regulations and asserted that the upfront costs to its lender needed to

be taken into account. Id. Hollywood Associates brought suit in district court, but the district

court agreed with HUD that the case belonged in the Court of Federal Claims because it involved

a Government contract. Id.

However, the Federal Circuit held that, as in Bowen, Hollywood Associates “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. Hollywood Associates 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

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Case 1:23-cv-01876-RAH Document 7 Filed 02/26/24 Page 27 of 30

Hollywood Associates 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 Hollywood Associates.” Id.

To the extent that plaintiffs attempt to turn an APA claim into a Tucker Act claim for

money-damages, the Court does not possess jurisdiction for the same reasons. Plaintiffs

similarly assert that SBA did not follow a “statutory mandate” in section 5003 of ARPA to award

grants in the order in which applications were received. See Compl. at ¶¶ 3, 5, 8, 9, 34. This is a

challenge to SBA’s interpretation of a law that controls payment to entities like plaintiffs, no

matter how it is dressed up in Tucker Act language. Plaintiffs seek to hold as unlawful SBA’s

interpretation of section 5003 as not requiring payment to eligible applicants strictly based on

their place in line. See id. at ¶¶ 8-9, 75, 80, 149-151. The essence of plaintiffs’ allegations is

that they did not receive free money from the Government while others, who applied later or had

defective applications, obtained grant awards. This is a claim for prospective relief under

plaintiffs’ chosen statutory interpretation, not compensation for a loss suffered. Plaintiffs also

seek to alter the relationship between the parties in the future.

Therefore, Katz is dispositive. As was the case for Hollywood Associates, no relief is

available under this Court’s jurisdiction. This Court does not possess jurisdiction to evaluate the

lawfulness, justness, or reasonableness of SBA’s actions and whether its management and

administration of this statutory program was arbitrary and capricious, even if money is demanded

as a remedy.

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Case 1:23-cv-01876-RAH Document 7 Filed 02/26/24 Page 28 of 30

VI. The Court Does Not Possess Subject-Matter Jurisdiction Over Negligence Claims

Plaintiffs extensively allege that SBA acted negligently in various aspects of its

administration of the RRF program. Id. at ¶¶ 9, 77, 80-83, 85, 86, 87, 97, 100, 101, 103, 105,

108, 110, 114, 119, 126, 128, 142, 143, 151-153. Similarly, plaintiffs also allege that SBA was

unreasonable or violated some “mandatory duty” inherent in section 5003 of ARPA. Id. at ¶¶

100, 151. Plaintiffs plainly attempt to bring tort claims. However, again, it is well-established

and non-controversial that this Court does not possess jurisdiction to entertain such claims.

The Tucker Act expressly removes tort actions from this Court’s jurisdiction. 28 U.S.C.

§ 1491(a). The Federal Circuit has thus recognized that “[t]he plain language of the Tucker Act

excludes from the Court of Federal Claims jurisdiction claims sounding in tort.” Rick’s

Mushroom Serv., Inc. v. United States, 521 F.3d 1338, 1343 (Fed. Cir. 2008). Instead, the

Federal Tort Claims Act, 28 U.S.C. § 2671 et seq., grants jurisdiction to hear tort claims

exclusively to United States district courts. 28 U.S.C. § 1346(b)(1); Shearin v. United States,

992 F.2d 1195, 1197 (Fed. Cir. 1993). This Court “does not have jurisdiction over claims that

defendant engaged in negligent, fraudulent, or other wrongful conduct when discharging its

official duties.” Cottrell v. United States, 42 Fed. Cl. 144, 149 (1998). Therefore, the Court

does not possess jurisdiction to determine if SBA acted negligently in its administration of the

RRF program.

VII. Transfer To A District Court Would Be Futile

Pursuant to 28 U.S.C. § 1631, when the Court lacks jurisdiction over a case, it is to

transfer the case to a different court where the lawsuit could have been brought if it is “in the

interest of justice” to do so. 28 U.S.C. § 1631. However, although the complaint makes

allegations that should be considered APA claims under district court jurisdiction, “a case should

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Case 1:23-cv-01876-RAH Document 7 Filed 02/26/24 Page 29 of 30

not be transferred or retransferred to a [d]istrict [c]ourt if it most probably would be a futile act.”

Little River Lumber Co. v. United States, 7 Cl. Ct. 492, 494 (1985) (citing Dancy v. United

States, 229 Ct. Cl. 300, 308 (1982)). Given that several district courts have correctly rejected

claims of disappointed RRF applicants as lacking standing and for mootness, it would not be in

the interest of justice to transfer a complaint with identical problems to district court. See

Infidels, LLC, 2023 WL 5599605, at *3; MC Mgmt. of Rochester LLC, 2023 WL 4194771, at *4;

Reboot Macon, LLC, 2023 WL 4672395, at *5; Kingsley Rests., Inc, 2021 WL 8441778, at *3;

cf. Keener, 2023 WL 2478367, at *7. Therefore, the Court should dismiss the complaint and not

transfer it elsewhere.

CONCLUSION

For these reasons, we respectfully request that the Court grant this motion and dismiss the

complaint lack of subject-matter jurisdiction.

Respectfully submitted,

BRIAN M. BOYNTON
Principal Deputy Assistant Attorney General

PATRICIA M. McCARTHY
Director

/s/ William J. Grimaldi
WILLIAM J. GRIMALDI
Assistant Director

/s/ Rebecca S. Kruser
REBECCA S. KRUSER
Senior Trial Counsel
Commercial Litigation Branch
Civil Division
U.S. Department of Justice
P.O. Box 480
Ben Franklin Station
Washington, D.C. 20044
Tel: (202) 305-2035

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Case 1:23-cv-01876-RAH Document 7 Filed 02/26/24 Page 30 of 30

rebecca.s.kruser@usdoj.gov

February 26, 2024 Attorneys for Defendant

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