Dismiss, Air Excursions LLC v. Yellen, No. 1:21-cv-01769 (D.D.C.), Doc. 11 (September 15, 2021)
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Defendants' motion to dismiss in Air Excursions, LLC v. Yellen, Case No. 1:21-cv-01769-TNM, Document 11, U.S. District Court for the District of Columbia, filed September 15, 2021. Defendants Department of the Treasury and Janet L. Yellen, Secretary of the Treasury, move to dismiss the Complaint and file a supporting memorandum. The memorandum argues that Air Excursions lacks standing, that the terms and conditions of Treasury's Payroll Support Program disbursements were committed to agency discretion and are not justiciable under the APA, and that Plaintiff has failed to state a claim. It describes payments to Corvus Airlines of approximately $30 million. The signature block names Jeremy S. Simon as counsel for Defendants.
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“Dismiss, Air Excursions LLC v. Yellen, No. 1:21-cv-01769 (D.D.C.), Doc. 11 (September 15, 2021).”
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Case 1:21-cv-01769-TNM Document 11 Filed 09/15/21 Page 1 of 41
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
__________________________________________
)
AIR EXCURSIONS, LLC, )
)
Plaintiff, )
v. )
) Case No. 21-1769 (TNM)
JANET L. YELLEN, in her official capacity as )
Secretary of the Treasury, et al., )
)
Defendants. )
__________________________________________)
DEFENDANTS’ MOTION TO DISMISS
Defendants Department of the Treasury (“Treasury”) and Janet L. Yellen, in her capacity
as Secretary of the Treasury (the “Secretary”), by and through undersigned counsel, respectfully
move pursuant to Federal Rules of Civil Procedure (“Rules”) 12(b)(1) and 12(b)(6) to dismiss
the Complaint filed in this matter. Accompanying this motion is a supporting memorandum,
supporting declaration and exhibits, and a proposed order.
Respectfully submitted,
CHANNING D. PHILLIPS, D.C. BAR #415793
Acting United States Attorney
BRIAN P. HUDAK
Acting Chief, Civil Division
By: _______/s/___________________
JEREMY S. SIMON, D.C. BAR #447956
Assistant United States Attorney
Civil Division
555 4th Street, N.W.
Washington, D.C. 20530
(202) 252-2528
Jeremy.Simon@usdoj.gov
Counsel for Defendants
Case 1:21-cv-01769-TNM Document 11 Filed 09/15/21 Page 2 of 41
TABLE OF CONTENTS
Memorandum of Points and Authorities…………………………………………………………..1
Facts ................................................................................................................................................ 4
Standard of Review ......................................................................................................................... 9
Argument ...................................................................................................................................... 13
I. Plaintiff Lacks Standing........................................................................................ 15
II. The Terms and Conditions of Treasury’s Payroll Support Disbursements Were
Committed to Agency Discretion and Are Not Justiciable under the APA. ......... 24
III. Plaintiff Has Failed To State A Claim. ................................................................. 31
IV. Plaintiff Has Failed To Meet Its Burden For Preliminary Injunctive Relief…….33
Conclusion .................................................................................................................................... 35
Case 1:21-cv-01769-TNM Document 11 Filed 09/15/21 Page 3 of 41
TABLE OF AUTHORITIES
Cases Page(s)
Al-Owhali v. Ashcroft,
279 F. Supp. 2d 13 (D.D.C. 2003) ............................................................................................ 10
Ark Initiative v. Tidwell,
749 F.3d 1071 (D.C. Cir. 2014) ................................................................................................ 15
Arpaio v. Obama,
27 F. Supp. 3d 185 (D.D.C. 2014) ............................................................................................ 16
Ashcroft v. Iqbal,
556 U.S. 662 (2009) .................................................................................................................. 11
Baltimore Gas & Elec. v. FERC,
252 F.3d 456 (D.C. Cir. 2001) ............................................................................................ 24, 30
Bartko v. Dep’t of Just.,
Civ. A. No. 13-1135 (JEB), 2015 WL 13673371 (D.D.C. Mar. 12, 2015) .............................. 12
Bell Atlantic Corp. v. Twombly,
550 U.S. 544 (2007) .................................................................................................................. 11
Bristol-Myers Squibb Co. v. Shalala,
91 F.3d 1493 (D.C. Cir. 1996) .................................................................................................. 18
CC Distributors, Inc. v. United States,
883 F.2d 146 (D.C. Cir. 1989) .................................................................................................. 26
Chaplaincy of Full Gospel Churches v. England,
454 F.3d 290 (D.C. Cir. 2006) ............................................................................................ 12, 13
CityFed Fin. Corp. v. OTS,
58 F.3d 738 (D.C. Cir. 1995) .............................................................................................. 13, 33
Clapper v. Amnesty Int’l USA,
568 U.S. 398 (2013) .................................................................................................................. 15
Confederated Tribes of the Chehalis Reservation v. Mnuchin,
456 F. Supp. 3d 152 (D.D.C. 2020) .......................................................................................... 27
Connecticut v. Dep’t of Interior,
344 F. Supp. 3d 279 (D.D.C. 2018) .......................................................................................... 33
Curran v. Holder,
626 F. Supp. 2d 30 (D.D.C. 2009) .............................................................................................. 9
Damus v. Nielsen,
2018 WL 3232515 (D.D.C. 2018) ............................................................................................ 12
Davis v. FEC,
554 U.S. 724 (2008) .................................................................................................................. 16
Drake v. F.A.A.,
351 U.S. App. D.C. 409, 291 F.3d 59 (D.C. Cir. 2002) ........................................................... 25
EEOC v. St. Francis Xavier Parochial Sch.,
117 F.3d 621 (D.C. Cir. 1997) .................................................................................................. 12
El Paso Natural Gas v. FERC,
50 F.3d 23 (D.C. Cir. 1995) ...................................................................................................... 18
Erby v. United States,
424 F. Supp. 2d 180 (D.D.C. 2006) .......................................................................................... 10
Case 1:21-cv-01769-TNM Document 11 Filed 09/15/21 Page 4 of 41
Farris v. Rice,
453 F. Supp. 2d 76 (D.D.C. 2006) ...................................................................................... 13, 34
Florida Audubon Soc. v. Bentsen,
94 F.3d 658 (D.C. Cir. 1996) .................................................................................................... 22
Goodwin v. Sec’y of HUD,
356 F.3d 310 (D.C. Cir. 2004) .................................................................................................. 24
Grand Lodge of Fraternal Order of Police v. Ashcroft,
185 F. Supp. 2d 9 (D.D.C. 2001) .............................................................................................. 10
Gull Airborne Instruments, Inc. v. Weinberger,
694 F.2d 838 (D.C. Cir. 1982) .................................................................................................. 19
Heckler v. Chaney,
470 U.S. 821 (1985) .................................................................................................................. 24
Henke v. Dep’t of Interior,
842 F. Supp. 2d 54 (D.D.C. 2012) ...................................................................................... 13, 34
Herbert v. Nat’l Acad. of Scis.,
974 F.2d 192 (D.C. Cir. 1992) .................................................................................................. 10
Hospitality Staffing Solutions, LLC v. Reyes,
736 F. Supp. 2d 192 (D.D.C. 2010) .......................................................................................... 12
Jerome Stevens Pharmacy, Inc. v. FDA,
402 F.3d 1249 (D.C. Cir. 2005) ................................................................................................ 10
Jovanovic v. US-Algeria Bus. Council,
561 F. Supp. 2d 103 (D.D.C. 2008) .......................................................................................... 11
Kokkonen v. Guardian Life Ins. Co. of Am.,
511 U.S. 375 (1994) .................................................................................................................... 9
League of Women Voters of the U.S. v. Newby,
838 F.3d 1 (D.C. Cir. 2016) ................................................................................................ 12, 13
Leatherman v. Tarrant Cnty. Narcotics Intel. & Coordination Unit,
507 U.S. 163 (1993) .................................................................................................................. 10
Lincoln v. Vigil,
508 U.S. 182 (1993) .................................................................................................................. 25
Lujan v. Defenders of Wildlife,
504 U.S. 555 (1992) ................................................................................................ 15, 16, 17, 21
Mdewakanton Sioux Indians of Minnesota,
255 F. Supp. 3d 48 (D.D.C. 2017) ............................................................................................ 33
Mendoza v. Perez,
754 F.3d 1002 (D.C. Cir. 2014) .................................................................................... 19, 20, 21
Nguyen v. Dep’t of Homeland Sec.,
460 F. Supp. 3d 27 (D.D.C. 2020) ...................................................................................... 22, 23
Oryszak v. Sullivan,
576 F.3d 522 (D.C. Cir. 2009) .................................................................................................. 24
Physicians for Soc. Resp. v. Wheeler,
956 F.3d 634 (D.C. Cir. 2020) .................................................................................................. 25
Privacy Info. Ctr. v. Presidential Advisory Comm’n on Election Integrity,
878 F.3d 371 (D.C. Cir. 2017) .................................................................................................. 15
Pursuing Am.’s Greatness v. FEC,
831 F.3d 500 (D.C. Cir. 2016) .................................................................................................. 12
Case 1:21-cv-01769-TNM Document 11 Filed 09/15/21 Page 5 of 41
Sampson v. Murray,
415 U.S. 61 (1974) .................................................................................................................... 33
Sherley v. Sebelius,
644 F.3d 388 (D.C. Cir. 2011) .................................................................................................. 12
United Farm Workers v. Chao,
593 F. Supp. 2d 166 (D.D.C. 2009) .......................................................................................... 13
United States ex rel. Digital Healthcare, Inc. v. Affiliated Computer,
778 F. Supp. 2d 37 (D.D.C. 2011) ............................................................................................ 10
Warth v. Seldin,
422 U.S. 490 (1975) .................................................................................................................. 15
Washington v. DOJ,
164 F. Supp. 3d 145 (D.D.C. 2016) .......................................................................................... 24
Webster v. Doe,
486 U.S. 592 (1988) .................................................................................................................. 26
Wendland v. Gutierrez,
580 F. Supp. 2d 151 (D.D.C. 2008) .......................................................................................... 25
Weyerhaeuser Co. v. U.S. Fish & Wildlife Serv.,
139 S. Ct. 361 (2018) ................................................................................................................ 25
Winter v. NRDC,
555 U.S. 7 (2008) ................................................................................................................ 12, 34
Wis. Gas Co. v. FERC,
758 F.2d 669 (D.C. Cir. 1985) ............................................................................................ 13, 34
Statutes
5 U.S.C. § 701(a)(2)...................................................................................................................... 24
5 U.S.C. § 704 ............................................................................................................................... 24
5 U.S.C. §§ 701-706 ..................................................................................................................... 24
49 U.S.C. § 40102(a)(2)................................................................................................................ 26
Regulations
2 CFR Part 180.............................................................................................................................. 29
Case 1:21-cv-01769-TNM Document 11 Filed 09/15/21 Page 6 of 41
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
__________________________________________
)
AIR EXCURSIONS, LLC, )
)
Plaintiff, )
v. )
) Case No. 21-1769 (TNM)
JANET L. YELLEN, in her official capacity as )
Secretary of the Treasury, et al., )
)
Defendants. )
__________________________________________)
DEFENDANTS’ COMBINED MEMORANDUM IN SUPPORT OF MOTION TO
DISMISS AND OPPOSITION TO MOTION FOR PRELIMINARY INJUNCTION
Defendants Department of the Treasury (“Treasury”) and Janet L. Yellen, in her capacity
as Secretary of the Treasury (the “Secretary”), oppose Plaintiff’s motion for preliminary injunction
for the reasons discussed below. On the same grounds as set forth below, Defendants move to
dismiss the Complaint under Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure.
INTRODUCTION
In response to the sudden economic disruption caused by the COVID-19 pandemic,
Congress enacted in March 2020 the Coronavirus Aid, Relief, and Economic Security (“CARES”)
Act, 134 Stat. 281 (2020), which, among other things, authorized the Secretary to provide financial
assistance on an expedited basis to air carriers for the purpose of supporting their payroll to avoid
layoffs (hereinafter, Payroll Support Program or “PSP”). Id. at § 4112. 1 Subsequent Payroll
1
The Act afforded the Secretary five days from its enactment to publish “streamlined and
expedited procedures” for air carriers to apply for payroll assistance and directed that initial
payments to recipients whose requests were approved by the Secretary should begin “not later
than” 10 days after the Act’s enactment. Id. at § 4113(b)(1)(B) and (2). The application
procedures are set forth on the standard application form developed by Treasury. (Leibenluft Decl.
¶ 3 and Ex. 1).
Case 1:21-cv-01769-TNM Document 11 Filed 09/15/21 Page 7 of 41
Support Program payments were authorized by the Consolidated Appropriations Act, 2021, 134
Stat. 1182, at 2052-061 (2021), and American Rescue Plan Act of 2021, 135 Stat 4, at 104-07
(2021). The approximately $30 million in Payroll Support Program payments to Corvus Airlines
(“Corvus”) at issue in this litigation were made in installments under all three Acts pursuant to
separate PSP Agreements. (Leibenluft Decl. ¶ 10). The final payment was disbursed in May
2021, and there are no further payments to be made to Corvus. (Leibenluft Decl. ¶¶ 10-11).
The instant lawsuit, filed on July 1, 2021, is brought under the Administrative Procedure
Act (“APA”) by Air Excursions, LLC (“Air Excursions”), which itself was a recipient of Payroll
Support Program payments. (Leibenluft Decl. ¶ 14). 2 Air Excursions claims without basis that it
has standing to ask this Court to direct Treasury to claw back the payroll support payments made
to Corvus on the faulty premise that Corvus – indisputably an “air carrier” under the CARES Act
and subsequent legislation – was not a lawful recipient of such payments. Air Excursions bases
this lawsuit on out-of-context snippets from a bankruptcy court order, which it contends forecloses
any payments to Corvus, even though the same order expressly contemplates that such payments
would be made. Air Excursions now seeks as “preliminary” injunctive relief an order directing a
clawback of all such payroll support funds. Air Excursions seeks what amounts to a mandatory
injunction, as opposed to maintenance of the status quo, without even attempting to establish that
it would suffer irreparable harm in the absence of the requested injunctive relief. Air Excursions
also seeks an order directing Treasury to refrain from any additional disbursements to Corvus,
disregarding the fact that there are no further disbursements to be made.
2
Air Excursions received approximately $250,000 in PSP payments. (Leibenluft Decl. ¶
14). Kalinin Aviation, LLC, which together with Air Excursions operates Alaska Seaplanes
(Compl. ¶ 2), also received a combined total of over $6 million in PSP assistance. (Leibenluft
Decl. ¶ 15)
2
Case 1:21-cv-01769-TNM Document 11 Filed 09/15/21 Page 8 of 41
Air Excursions lacks standing to assert this claim because (1) its asserted injury – vague
speculation about a lost business opportunity arising from Corvus’s continued service of certain
air passenger routes in Alaska – is not within the zone of interest that the applicable statutes sought
to protect by authorizing payroll support payments; (2) its asserted injury is not causally related to
the PSP payments that Treasury made to Corvus; and (3) its asserted injury is not redressable by
the relief requested.
Apart from the lack of standing, the issues that Plaintiff raises under the APA – namely,
whether Corvus was compliant with the terms and conditions established by Treasury for receipt
of such funds and the appropriate remedy in the counterfactual event that Treasury were to deem
Corvus non-compliant – are matters solely within Treasury’s discretion and thus are not actionable
under the APA. Finally, as explained below, Plaintiff also has failed plausibly to plead that Corvus
was not a “recipient” as that term was contractually defined in Corvus’s payroll support
agreements with Treasury, even under the strict reading of that definition that Air Excursions
advances.
In addition to these legal defects, the larger context in which these claims have been made
bears noting. This lawsuit appears to be the most recent step in an ongoing strategy by Air
Excursions to prevent Corvus from continuing to offer passenger air transportation over certain
routes in Alaska – a market that Air Excursions apparently wants to enter and dominate. Prior to
the filing of this lawsuit, Air Excursions sought unsuccessfully to purchase the assets of Corvus in
that entity’s bankruptcy proceeding. Following the bankruptcy-court approved sale of those assets
to the successful bidder, FLOAT ALASKA, LLC (“FLOAT”), Air Excursions objected
unsuccessfully to Corvus resuming operations under FLOAT’s ownership by asking the
Department of Transportation to reverse its preliminary decision that Corvus was fit to hold the
3
Case 1:21-cv-01769-TNM Document 11 Filed 09/15/21 Page 9 of 41
required certificate to serve as an air carrier. Now, Air Excursions is seeking to enlist this Court
in an apparent effort to undermine the finances of its competitor by seeking an order directing
Treasury to claw back the PSP payments that have been made to Corvus.
For reasons addressed below, the Complaint should be dismissed for lack of jurisdiction
and failure to state a claim. In addition, because Air Excursions cannot establish a likelihood of
success on the merits, and also has failed to meet its burden of showing irreparable harm or that
an injunction would be in the public interest (as opposed to Air Excursions’ competitive interest),
the motion for preliminary injunction also should be denied.
FACTS
I. Treasury’s Payment To Corvus Under The First PSP Agreement
On April 3, 2020, Corvus, a subsidiary of Ravn Air Group, Inc., applied for payroll support
assistance under the CARES Act. (Ex. 1 to Leibenluft Decl.). Two days later, Ravn Air Group,
along with certain subsidiaries including Corvus, filed for bankruptcy protection under Chapter
11. See In re Ravn Air Group, Inc., Case No. 20-10755 (Bankr. Del.). 3
During the pendency of the bankruptcy proceeding, Treasury conditionally approved
Corvus’s PSP application and sent Corvus a PSP Agreement and Bankruptcy Addendum to
execute, which Corvus signed after obtaining approval from the bankruptcy court to do so.
(Compl. ¶¶ 18-19, 20, 22). To support its motion for bankruptcy court approval to sign this
agreement, Corvus explained as the requisite business need that most third parties had conditioned
their bids for Corvus’s assets on the right to receive Corvus’s payroll support funds and that “the
3
The debtors in the bankruptcy were: Ravn Air Group, Inc., Ravn Air Group Holdings,
LLC, JJM, Inc., HoTH, Inc., Peninsula Aviation Services, Inc., Corvus Airlines, Inc., Frontier
Flying Service, Inc., and Hageland Aviation Services, Inc. (Ex. C to Pl. Mot. at 1 n.1).
4
Case 1:21-cv-01769-TNM Document 11 Filed 09/15/21 Page 10 of 41
majority of the funds available under the PSP” program would “be used by the purchaser of the
Debtors’ assets as a going concern” rather than by the Debtors prior to the asset sale. (Case No.
20-10755 (Bankr. Del.), ECF No. 377 at 6, 8). Corvus emphasized that expedited approval of the
motion was “important to satisfying potential bidders that the PSP” funds “will be available,
subject to Treasury approval of a sale transaction, as bidders conduct their diligence and prepare
bids in advance of the June 24 [2020] bid deadline and any subsequent auction.” (Id.). The
bankruptcy court approved that motion on June 28, 2020 (id., ECF No. 408), and did so with
knowledge that the purchaser of Corvus’s stock and assets (ultimately FLOAT) would receive the
payroll support payments. Treasury signed the PSP Agreement on July 22, 2020 (the “first PSP
Agreement” or “PSP1 Agreement”) and the Bankruptcy Addendum on July 28, 2020. (Ex. 2 and
3 to Leibenluft Decl.).
On July 9, 2020, FLOAT was named the successful bidder for the purchase of the Debtors’
assets and, by order dated August 5, 2020, the bankruptcy court approved an Asset Purchase
Agreement between the Debtors (including Corvus) and FLOAT. (Case No. 20-10755, ECF No.
434-1 and ECF No. 492 and 492-1). The transferred assets included the capital stock of Corvus,
“substantially all assets” of Corvus, as well as “all right, title, and interest of the Seller in and to
any and all federal loans, grants, subsidies, or other forms of funding with respect to Corvus and/or
the Part 121 Certificates, including, without limitation, to monies or rights to monies pursuant to
the Coronavirus Aid, Relief, and Economic Security (CARES) Act.” (Id., ECF No. 434-1 and
ECF No. 492-1 at § 1.1(f) and (k)). Under the Asset Purchase Agreement approved by the
5
Case 1:21-cv-01769-TNM Document 11 Filed 09/15/21 Page 11 of 41
bankruptcy court, the PSP Agreement executed in July 2020 was assigned to FLOAT, with
disbursements to be made to New Corvus. 4 (Id., ECF No. 492-1 at § 5.6(e) and § 7.2(e))
Treasury made the first PSP payment of approximately $2.5 million to New Corvus on
September 4, 2020. (Leibenluft Decl. ¶ 10). Subsequent payments were made to New Corvus
under the first PSP Agreement in November 2020 and March 2021 for a total payment of
approximately $10.3 million under that Agreement. (Id.)
II. Treasury’s Payments to New Corvus Under PSP2 and PSP3 Agreements
On January 11, 2021, New Corvus applied for a payroll assistance payment under the
Consolidated Appropriations Act, 2021, 134 Stat. 1182, at 2052-061 (2021), and New Corvus and
Treasury executed a Payroll Support Program Extension Agreement (“PSP2 Agreement”) in April
2021. (Ex. 4 and 5 to Leibenluft Decl.). New Corvus received a total of approximately $10.3
million in three installments in April 2021 pursuant to that Agreement. (Leibenluft Decl. ¶ 10).
New Corvus was the applicant for this assistance, not pre-bankruptcy Old Corvus. (Ex. 4 to
Leibenfult Decl.).
On April 21, 2021, Treasury executed a third PSP Agreement with New Corvus under the
American Rescue Plan Act of 2021. (Ex. 6 to Leibenluft Decl.) (“PSP3 Agreement”). Treasury
made payments of approximately $10 million to New Corvus in two installments under that
Agreement, the last of which was made on May 27, 2021. (Leibenluft Decl. ¶ 10). No further
payments are scheduled. (Id. ¶ 11).
4
In the remainder of this brief, we refer to the Ravn Air Group subsidiary Corvus Airlines
as “Old Corvus”, and the post-bankruptcy, FLOAT-owned Corvus Airlines as “New Corvus.”
6
Case 1:21-cv-01769-TNM Document 11 Filed 09/15/21 Page 12 of 41
III. Air Excursions’ Efforts To Obtain Corvus’s Air Passenger Routes In Alaska.
During the bankruptcy proceeding, various third parties submitted bids to acquire Old
Corvus’ assets. Air Excursions, which along with Kalinin Aviation does business as Alaska
Seaplanes, tendered several offers for the debtors’ assets during the bankruptcy process in an effort
to obtain Old Corvus’s air passenger routes in Alaska. (ECF No. 9-1, Craford Decl. ¶¶ 3, 5 and
Ex. 1 thereto). Air Excursions asserted that its bid was “unquestionably superior” to FLOAT’s
bid, citing, among other things, FLOAT’s “closing condition” of “Corvus CARES funds/rights
transfer.” (Case No. 20-10755, ECF No. 485 at 6 ¶ 10). Although characterizing that as a
“disguised condition[]” to obtain “government approval of the transfer of CARES Act rights,” Air
Excursions did not object to the asset sale to FLOAT (id.), which the bankruptcy court approved. 5
After FLOAT was identified as the successful bidder, Air Excursions, under its trade name
Alaska Seaplanes, publicly announced on July 28, 2020, a plan to compete for the routes serviced
by Old Corvus. (ECF No. 9-1 at ECF Page 7). In that press announcement, Air Excursions stated
that it “will relaunch passenger air service on routes formerly served by . . . Corvus.” (Id.). The
announcement further explained that Air Excursions had made an unsuccessful attempt to obtain
Old Corvus’s assets during the bankruptcy process and that it remained “undeterred.” (Id.). The
5
The order approving the sale stated that “All objections to the Sale Motion, the
Transaction, or the relief requested therein that have not been withdrawn, waived, or settled as
announced to the Court at the Sale Hearing or by stipulation filed with the Court, and all
reservations of rights included in such objections or otherwise, are hereby denied and overruled
on the merits with prejudice. Those parties who did not object or withdrew their objections to the
Sale Motion are deemed to have consented pursuant to section 363(f)(2) of the Bankruptcy Code.”
(Ex. C to Pl.’s Mot. at ¶ 3) The bankruptcy docket does not reflect any “objections” filed by Air
Excursions to the asset sale, but only a “statement” regarding its “bid position.” See Case No. 20-
10755, ECF No. 485.
7
Case 1:21-cv-01769-TNM Document 11 Filed 09/15/21 Page 13 of 41
route specified in the press release encompassed Dutch Harbor/Unalaska with direct flights from
Anchorage. (Id.)
On August 11, 2020, New Corvus (now owned by FLOAT) filed a notice with the
Department of Transportation to resume its scheduled passenger service and, on October 13, 2020,
the Department of Transportation issued a decision tentatively approving that request. In re
Corvus Airlines, Inc., Docket DOT-OST-2020-0134 (Ex. 1 hereto). Air Excursions’ parent
company, Kalinin Holdings (ECF No. 9-1, Craford Decl. ¶ 2), attempted to prevent New Corvus
from resuming operations by filing an objection with the Department of Transportation. (Ex. 2
hereto). The Department of Transportation overruled that objection and issued a final order
allowing New Corvus to resume operations on November 20, 2020. (Id.) According to the
Complaint, beginning in November 2020, “FLOAT began providing passenger air transportation
on certain of the routes that Air Excursions intended to serve, including between Anchorage and
Dutch Harbor.” (Compl. ¶ 41).
Air Excursions’ asserted “injury in fact,” on which it claims standing to sue, rests on vague
allegations regarding the alleged loss of a business opportunity relating to Air Excursions’ initial
attempt in early 2021 to implement the plan announced in its July 2020 press release. (Compl.
¶¶ 42-43). Air Excursions asserts that it had attempted to negotiate with FLOAT over a possible
sublease of the commuter gate space at Anchorage International Airport that had been leased by
FLOAT. (Id. ¶ 42). Air Excursions claims that FLOAT failed to negotiate in “good faith” and
that, as a result, no sublease agreement was reached, thereby allegedly preventing Air Excursions
from pursuing a charter flight program with a third party that would have allowed Air Excursions
to enter the Anchorage-Dutch Harbor passenger air transportation market. (Id ¶¶ 42-43; ECF
No. 9-1, Craford Decl. ¶ 9). Air Excursions does not allege that it had an agreement with that
8
Case 1:21-cv-01769-TNM Document 11 Filed 09/15/21 Page 14 of 41
third party, or that such an agreement was imminent, but only that there had been one “in person”
meeting to “discuss the proposed flight program,” and that FLOAT’s conduct was “in part”
responsible for Air Excursions’ decision to decline the opportunity. (ECF No. 9-1, Craford Decl.
¶ 9)
Based on these vague allegations, Air Excursions asserts that “Treasury’s actions have
enabled FLOAT to prevent Air Excursions from entering the Anchorage-Dutch Harbor passenger
air transportation market, causing Air Excursions to sustain an economic injury in fact.” (Compl.
¶ 43). A similar assertion is made in the declaration of Kent Craford (President of Air Excursions
and Kalinin Holdings) filed in support of Air Excursions’ motion for preliminary injunction.
(ECF No. 9-1, Craford Decl. ¶¶ 2, 10).
However, on August 3, 2021, and omitted from the Craford Declaration, Air Excursions,
under its trade name Alaska Seaplanes, publicly announced that it had formed Aleutian Airways
and would be providing direct flights from Anchorage to Dutch Harbor beginning in the Fall of
2021. See Ex. 3 hereto (https://aleutianair.com/Aleutian-Airways-to-Launch-8-3-21.pdf).
Although Craford is identified as the contact for that press release and is quoted in the release
(id.), his declaration dated August 24, 2021, fails to mention this development.
STANDARD OF REVIEW
I. Rule 12(b)(1) Standard
A motion to dismiss under Federal Rule of Civil Procedure 12(b)(1) “presents a threshold
challenge to the Court’s jurisdiction,” and thus “the Court is obligated to determine whether it has
subject-matter jurisdiction in the first instance.” Curran v. Holder, 626 F. Supp. 2d 30, 32 (D.D.C.
2009) (internal citation and quotation marks omitted). “[I]t is presumed that a cause lies outside
[the federal courts’] limited jurisdiction,” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S.
9
Case 1:21-cv-01769-TNM Document 11 Filed 09/15/21 Page 15 of 41
375, 377 (1994), unless the plaintiff can establish by a preponderance of the evidence that the
Court possesses jurisdiction. See, e.g., United States ex rel. Digital Healthcare, Inc. v. Affiliated
Computer, 778 F. Supp. 2d 37, 43 (D.D.C. 2011). Thus, the “‘plaintiff’s factual allegations in the
complaint . . . will bear closer scrutiny in resolving a 12(b)(1) motion than in resolving a 12(b)(6)
motion for failure to state a claim.’” Id. (quoting Grand Lodge of Fraternal Order of Police v.
Ashcroft, 185 F. Supp. 2d 9, 13-14 (D.D.C. 2001).
More specifically, a Rule 12(b)(1) motion to dismiss for lack of jurisdiction may be
presented as either a facial or factual challenge. Herbert v. Nat’l Acad. of Scis., 974 F.2d 192, 197
(D.C. Cir. 1992) (a district court may “dispose of a motion to dismiss for lack of subject matter
jurisdiction . . . on the complaint standing alone” or “may consider the complaint supplemented by
undisputed facts”). “A facial challenge attacks the factual allegations of the complaint that are
contained on the face of the complaint, while a factual challenge is addressed to the underlying
facts contained in the complaint.” Al-Owhali v. Ashcroft, 279 F. Supp. 2d 13, 20 (D.D.C. 2003)
(internal quotations and citations omitted).
When a defendant makes a facial challenge, the district court must accept the allegations
contained in the complaint as true and consider the factual allegations in the light most favorable
to the non-moving party. Leatherman v. Tarrant Cnty. Narcotics Intel. & Coordination Unit,
507 U.S. 163, 164 (1993); see also Erby v. United States, 424 F. Supp. 2d 180, 182 (D.D.C. 2006).
With respect to a factual challenge, the district court may consider materials outside of the
pleadings to determine whether it has subject matter jurisdiction over the claims. Jerome Stevens
Pharmacy, Inc. v. FDA, 402 F.3d 1249, 1253 (D.C. Cir. 2005). The plaintiff bears the burden of
establishing the factual predicates of jurisdiction by a preponderance of evidence. Erby, 424 F.
Supp. 2d at 182.
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II. Rule 12(b)(6) Standard
A Rule 12(b)(6) motion tests the legal sufficiency of a complaint. In ruling on a motion to
dismiss, the Court “must construe the complaint in a light most favorable to the plaintiff and must
accept as true all reasonable factual inferences drawn from well-pleaded factual allegations.”
Jovanovic v. US-Algeria Bus. Council, 561 F. Supp. 2d 103, 110 (D.D.C. 2008). In Bell Atlantic
Corp. v. Twombly, 550 U.S. 544 (2007), the Supreme Court clarified the standard of pleading that
a plaintiff must meet to survive a motion to dismiss under Rule 12(b)(6). Although “detailed
factual allegations” are not necessary to survive a Rule 12(b)(6) motion to dismiss, to provide the
“grounds” of “entitle[ment] to relief,” a plaintiff must furnish “more than labels and conclusions”
or “a formulaic recitation of the elements of a cause of action.” Id. at 555. The Court stated that
while there was no “probability requirement at the pleading stage,” id. at 556, “something beyond
. . . mere possibility . . . must be alleged[.]” Id. at 557-58. The facts alleged in the complaint “must
be enough to raise a right to relief above the speculative level,” id. at 555, or must be sufficient to
“state a claim for relief that is plausible on its face,” id. at 570.
The Court in Ashcroft v. Iqbal, 556 U.S. 662 (2009), further clarified the plausibility
pleading standard, explaining that this standard “demands more than an unadorned, the-defendant-
unlawfully-harmed-me accusation.” Id. at 678. The plausibility standard “asks for more than a
sheer possibility that a defendant acted unlawfully. . . . [W]here the well-pleaded facts do not
permit the court to infer more than the mere possibility of misconduct, the complaint has alleged
but it has not ‘show[n] that the pleader is entitled to relief.’” Id. On a motion to dismiss, under
Rule 12(b)(6), the Court may consider, in addition to the facts alleged in the complaint, documents
either attached to, or incorporated into the complaint by reference, as well as matters of which it
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may take judicial notice. See EEOC v. St. Francis Xavier Parochial Sch., 117 F.3d 621, 624-25
(D.C. Cir. 1997). 6
III. Preliminary Injunction Standard
A “preliminary injunction is an extraordinary remedy never awarded as of right.” Winter
v. NRDC, 555 U.S. 7, 24 (2008). A party seeking preliminary relief must make a “clear showing
that four factors, taken together, warrant relief: likely success on the merits, likely irreparable harm
in the absence of preliminary relief, a balance of the equities in its favor, and accord with the public
interest.” League of Women Voters of the U.S. v. Newby, 838 F.3d 1, 6 (D.C. Cir. 2016) (quoting
Pursuing Am.’s Greatness v. FEC, 831 F.3d 500, 505 (D.C. Cir. 2016)). The moving party bears
the burden of persuasion and must demonstrate, “by a clear showing,” that the requested relief is
warranted. Hospitality Staffing Solutions, LLC v. Reyes, 736 F. Supp. 2d 192, 197 (D.D.C. 2010)
(quoting Chaplaincy of Full Gospel Churches v. England, 454 F.3d 290, 297 (D.C. Cir. 2006)).
Before the Supreme Court’s decision in Winter, courts weighed these factors on a “sliding
scale,” allowing “an unusually strong showing on one of the factors” to overcome a weaker
showing on another. Damus v. Nielsen, 2018 WL 3232515, at *4 (D.D.C. 2018). The D.C. Circuit
has suggested, without deciding, that Winter—which overturned the Ninth Circuit’s “possibility
of irreparable harm” standard— “should be read to abandon the sliding-scale analysis in favor of
a ‘more demanding burden’ requiring Plaintiffs to independently demonstrate both a likelihood of
success on the merits and irreparable harm.” Bartko v. Dep’t of Just., Civ. A. No. 13-1135 (JEB),
2015 WL 13673371, at *1 (D.D.C. Mar. 12, 2015) (citing Sherley v. Sebelius, 644 F.3d 388, 392–
6
Corvus’ PSP Application forms and PSP Agreements (Leibenluft Decl. Exhs. 1-6) are
incorporated into the Complaint by reference, and may be considered on this motion to dismiss
without converting the motion into a motion for summary judgment. (Compl. ¶¶ 14 (PSP1
Application); 21-23, 32-34 (PSP1 Agreement and Bankruptcy Addendum); 38 (PSP2 Application
and Agreement); 39 (PSP3 Agreement).
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93 (D.C. Cir. 2011), and Davis, 571 F.3d at 1292); see also League of Women Voters, 838 F.3d at
7 (declining to address whether “sliding scale” approach is valid after Winter).
Even before Winter, courts in the D.C. Circuit consistently stressed that “a movant must
demonstrate ‘at least some injury’ for a preliminary injunction to issue.” Chaplaincy of Full
Gospel Churches, 454 F.3d at 297 (quoting CityFed Fin. Corp. v. OTS, 58 F.3d 738, 747 (D.C.
Cir. 1995)). Thus, “if a party makes no showing of irreparable injury, the court may deny the
motion without considering the other factors.” Henke v. Dep’t of Interior, 842 F. Supp. 2d 54, 59
(D.D.C. 2012); see also Chaplaincy of Full Gospel Churches, 454 F.3d at 297 (same).
A movant alleging “speculative injuries” cannot meet the “‘high standard for irreparable
injury’ sufficient to warrant the extraordinary relief of a TRO,” and “the Court need not reach the
other factors relevant to the issue of injunctive relief.” United Farm Workers v. Chao, 593 F.
Supp. 2d 166, 171 (D.D.C. 2009); see Bartko, 2015 WL 13673371 at *2 (“The Court need not
grant injunctive relief ‘against something merely feared as liable to occur at some indefinite time’”)
(quoting Wis. Gas Co. v. FERC, 758 F.2d 669, 674 (D.C. Cir. 1985)). “[T]he movant must
demonstrate the injury is of such ‘imminence’ that there is a clear and present need to equitable
relief to prevent irreparable harm.” Id. And “where a party seeks to change the status quo through
action rather than merely to preserve the status quo—typically the moving party must meet an even
higher standard than in the ordinary case: the movant must show ‘clearly’ that [it] is entitled to
relief or that extreme or very serious damage will result.” Farris v. Rice, 453 F. Supp. 2d 76, 78
(D.D.C. 2006).
ARGUMENT
On July 1, 2021, Air Excursions filed the instant lawsuit against Treasury under the
APA, asking that this Court declare unlawful the PSP payments made by Treasury to Corvus under
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the CARES Act and subsequent legislation and direct Treasury to claw back those payments. Air
Excursions contends that New Corvus was not a legitimate recipient of payroll assistance under
the CARES Act for which Old Corvus had applied because the bankruptcy court order approving
the sale of Corvus’s assets to FLOAT (under which Corvus resumed operations post-bankruptcy)
states that FLOAT was not the “successor” to certain liabilities of the Debtors and also contained
a “no merger” clause stating that the buyer (FLOAT) was not a continuation of the Debtors. Air
Excursions asserts that this “no successor” language in the order approving the asset sale meant
that New Corvus could not be a “recipient” of payroll support as the term “recipient” is defined
in the first Payroll Support Agreement. That agreement defines the term “recipient” as including
“‘the Signatory Entity,’” which was Old Corvus, and “its ‘successors, and assigns.’” (Pl. Mot. at
5-9)
Plaintiff contends that that New Corvus was not a “successor” to Old Corvus according to
the asset sale order, and thus was not a “recipient” of the payroll support payments made under
that first agreement. (Id. at 9). Plaintiff fails to address the “assigns” language in the definition
of “recipient,” or other provisions of the PSP Agreement discussed below that render Plaintiff’s
argument untenable. Moreover, Plaintiff’s argument, however misplaced, is limited to
disbursements made under the first PSP Agreement (for which Old Corvus was the signatory)
and is wholly inapplicable to disbursements made to New Corvus under the second and third PSP
Agreements, in which New Corvus was the signatory.
Even more fundamentally, Plaintiff comes nowhere close to satisfying the demanding
standard for preliminary injunctive relief. Its motion makes no attempt to establish irreparable
harm, but instead it asserts, contrary to law, that it meets that distinct element of the preliminary
injunction standard if it can establish a likelihood of success on the merits. (ECF No. 9, Pl. Mot.
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at 17) Thus, for reasons discussed below, the motion for preliminary injunction should be denied
and the Complaint dismissed with prejudice.
I. Plaintiff Lacks Standing.
Article III of the Constitution requires a plaintiff to “allege[ ] such a personal stake in the
outcome of the controversy as to warrant his invocation of federal-court jurisdiction and to justify
exercise of the court’s remedial powers on his behalf.” Warth v. Seldin, 422 U.S. 490, 498-99
(1975) (citations and quotations omitted). Built on separation-of-powers principles, standing
“serves to prevent the judicial process from being used to usurp the powers of the political
branches.” Clapper v. Amnesty Int’l USA, 568 U.S. 398, 408 (2013). To satisfy the “‘irreducible
constitutional minimum’ of standing” under Article III, a plaintiff must demonstrate that it has:
“(1) an ‘injury in fact’ that is ‘concrete and particularized’ as well as ‘actual or imminent’; (2) a
‘causal connection’ between the injury and the challenged conduct; and (3) a likelihood, as
opposed to mere speculation, ‘that the injury will be redressed by a favorable decision.” Ark
Initiative v. Tidwell, 749 F.3d 1071, 1075 (D.C. Cir. 2014) (quoting Lujan v. Defenders of Wildlife,
504 U.S. 555, 560-61 (1992)). When, as here, “the plaintiff is not [it]self the object of the
government action or inaction [it] challenges, standing is not precluded, but it is ordinarily
‘substantially more difficult’ to establish.” Lujan, 504 U.S. at 562. The party invoking federal
jurisdiction bears the burden of establishing these elements. Id. at 561.
Particularly in the context of a preliminary injunction, courts “require the plaintiff to show
a substantial likelihood of standing under the heightened standard for evaluating a motion for
summary judgment.” Elec. Privacy Info. Ctr. v. Presidential Advisory Comm’n on Election
Integrity, 878 F.3d 371, 377 (D.C. Cir. 2017) (internal quotation marks and citation omitted). A
plaintiff seeking such extraordinary relief, therefore, “cannot rest on mere allegations, but must set
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forth by affidavit or other evidence specific facts that, if taken to be true, demonstrate a substantial
likelihood of standing.” Id. (quoting Lujan, 504 U.S. at 561). “[B]ecause standing is a necessary
predicate to any exercise of the Court’s jurisdiction, the plaintiff and its claims have no likelihood
of success on the merits, if the plaintiff lacks standing.” Arpaio v. Obama, 27 F. Supp. 3d 185,
207 (D.D.C. 2014), aff’d, 797 F.3d 11 (D.C. Cir. 2015) (citations omitted). Similarly, an absence
of standing “dooms the plaintiff’s ability to show irreparable harm.” Id.
A. Plaintiff Has Not Alleged That It Has Standing To Challenge Any Payments
Under The Second Or Third PSP Agreements.
Standing is “‘not dispensed in gross.’” Davis v. FEC, 554 U.S. 724, 734 (2008). “Rather,
‘a plaintiff must demonstrate standing for each claim he seeks to press and ‘for each form of relief’
that is sought.” Id. Plaintiff asserts that each decision by Treasury to disburse funds to Corvus
constitutes a distinct final agency action that is subject to challenge under the APA. (Compl. ¶ 46).
Such disbursements were made under three distinct PSP Agreements pursuant to three separate
statutes in roughly equal amounts of approximately $10 million disbursed during the periods of
September 2020 to March 2021 (PSP1 Agreement); April 6, 2021 to April 22, 2021 (PSP2
Agreement); and April 23, 2021 to May 27, 2021 (PSP3 Agreement). (Leinbenluft Decl. ¶ 10).
Thus, to challenge the disbursements made under each discrete PSP Agreement, Plaintiff must
establish that it has standing with respect to that particular disbursement decision.
Plaintiff has made no effort to assert a theory of standing as to the disbursements made
under the second and third PSP Agreements, which began in April 2021. Each such payment was
made after the alleged injury suffered by Plaintiff in March 2021, when it was unable to secure
gate space at the Anchorage airport. Because Plaintiff does not allege that it has suffered any
injury as a result of these payments, it lacks standing to pursue claims based on such payments or
to require Treasury to claw them back.
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B. Plaintiff Has Failed To Demonstrate Standing To Challenge Any Payments
Under The First PSP Agreement.
Plaintiff has failed to meet any of the required elements for standing to challenge any
payments made under the first PSP Agreement, which were completed by the end of March 2021.
As to those payments, Plaintiff attempts to address only the “injury in fact” element in its motion
for preliminary injunction and fails to address the other required elements of causation and
redressability. As discussed below, Plaintiff can establish none of these elements.
1. Plaintiff Has Failed To Demonstrate An “Injury In Fact.”
Plaintiff has failed to meet its burden of demonstrating an “injury in fact,” which requires
that Plaintiff adequately plead “an invasion of legally protected interests that is both (a) concrete
and particularized and (b) actual or imminent, not conjectural or hypothetical.” Lujan, 504 U.S.
at 560. Air Excursions’ asserted “harm” is based on vague allegations regarding the alleged loss
of a potential business opportunity after Air Excursions attempted in early 2021 to implement a
plan to begin air passenger service on the Anchorage-Dutch Harbor route serviced by New
Corvus. (ECF No. 9-1, Craford Decl. ¶ 7) According to Air Excursions, it had to negotiate with
FLOAT to sublease commuter gate space at the Anchorage airport because FLOAT already had
leased that gate space. Air Excursions claims that those negotiations were unsuccessful for
reasons that are not specified other than the conclusory assertion that FLOAT failed to negotiate
in “good faith.” (ECF No. 9-1, Craford Decl. ¶ 8; Compl. ¶ 42)
At the same time, Air Excursions allegedly was in the early stage of discussions with a
third party on a proposed charter flight program which, as described by Air Excursions, had not
progressed beyond the point of an initial “in person” meeting. (ECF No. 9-1, Craford Decl. ¶ 9)
Air Excursions asserts that it ultimately “had to decline the opportunity, in part because FLOAT’s
conduct denied Air Excursions the gate space at [the Anchorage airport] that it needed for the
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flights.” (Id., emphasis added). Air Excursions fails to plead facts that would allow the Court to
infer that any agreement with this third party was imminent or had advanced beyond the
preliminary discussion stage, and, without such allegations, the alleged loss of business
opportunity is entirely conjectural. Accordingly, Air Excursions has failed to establish any injury
in fact.
Plaintiff attempts to rely on a “competitive standing” theory to establish injury in fact, but
that reliance is misplaced. “The nub of the ‘competitive standing’ doctrine is that when a
challenged agency action authorizes allegedly illegal transactions that will almost surely cause
petitioner to lose business, there is no need to wait for injury from specific transactions to claim
standing.” El Paso Natural Gas v. FERC, 50 F.3d 23, 27 (D.C. Cir. 1995). As explained in El
Paso Natural Gas, this means that the plaintiff must allege that the agency has authorized a
competitor to engage in transactions that are contrary to substantive law and will harm the
plaintiff’s business. Id. at 28. For instance, the D.C. Circuit has found competitive standing in a
drug developer’s challenge to the FDA permitting a competitor to market a generic version
allegedly in violation of a statute that protected the developer of the drug from the competition of
generic brands. Bristol-Myers Squibb Co. v. Shalala, 91 F.3d 1493, 1499 (D.C. Cir. 1996).
Here, however, there is no allegation that the competitor, New Corvus, “is not legally
entitled to serve . . . the customers for which [Air Excursions] hope[s] to compete,” and there
likewise is no allegation that Treasury has authorized Air Excursions’ competitors to engage in
allegedly illegal transactions that are competitively harmful to Air Excursions. El Paso Natural
Gas, 50 F.3d at 28. To the contrary, the record establishes that New Corvus can lawfully service
air passengers within the market Air Excursions seeks to enter. Accordingly, as in El Paso Natural
Gas, Air Excursions cannot establish injury in fact based on the competitive standing doctrine.
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Citing Mendoza v. Perez, 754 F.3d 1002 (D.C. Cir. 2014), Plaintiff appears to contend that
it has established competitive standing because the payroll support payments to New Corvus under
the first PSP Agreement helped New Corvus financially, thereby enabling it to resume service of
its air passenger routes in Alaska and emboldening FLOAT, as its parent, to take a tough
negotiating position over the sublease of gate space at the Anchorage airport. But the mere
existence of a competitor lawfully engaged in business is not sufficient to establish competitive
standing. Plaintiff instead must “demonstrate that the regulatory or statutory requirements it seeks
to enforce were intended to protect it against such [alleged] competitive injury.” Gull Airborne
Instruments, Inc. v. Weinberger, 694 F.2d 838, 842 (D.C. Cir. 1982). The payroll support
payments authorized by the CARES Act, however, were not designed to regulate competition
among air carriers but to minimize airline industry layoffs resulting from the abrupt reduction in
air travel caused by onset of the COVID pandemic in the spring of 2020. CARES Act, 134 Stat.
498 at § 4112 (entitled “Pandemic Relief For Aviation Workers”). The statute’s purpose is made
clear by the requirement that payroll support funds “shall exclusively be used for the continuation
of employee wages, salaries, and benefits.” Id. Those who may fall within the “zone of interest”
protected by this provision of the statute, therefore, could include aviation companies seeking such
funds, as well as their workers, but not the owners of an airline upset that its competitor was able
to financially survive the pandemic and continue to compete. See Gull Airborne, 694 F.2d at 841-
42. Consequently, because Plaintiff’s asserted injury was not in the “zone of interests to be
protected . . . by the statute,” Plaintiff has failed to demonstrate a cognizable injury in fact. Id.;
see also AICPA v. IRS, No. 16-5256, 2018 U.S. App. LEXIS 22583, at *6 (D.C. Cir. Aug. 14,
2018) (“‘The essential inquiry’ for the applicable zone of interest ‘is whether Congress intended
for a particular class of plaintiffs to be relied upon to challenge agency disregard of the law.’”).
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Mendoza does not hold otherwise. In Mendoza, the plaintiffs were laborers who claimed
procedural injury standing based on a claim that the Department of Labor violated the APA by
approving special procedures without notice and comment that allegedly authorized inexpensive
foreign labor that competed against them. 754 F.3d at 1007. At the threshold, Mendoza is thus
inapplicable because it concerns standing for a claimed procedural injury, which is not the nature
of the claim here.
As the D.C. Circuit recognized, the requirements of standing differ when a plaintiff seeks
to enforce procedural, rather than substantive, rights. Id. at 1011. Once a plaintiff establishes that
the agency action “threatens their concrete interest,” which can be established by allegations of
increased competition or lost opportunity, the standards for “immediacy and redressability are
relaxed,” and plaintiff “need not demonstrate that but for the procedural violation the agency
action would have been different.” Id. Here, Plaintiff has not made a procedural challenge and
thus Mendoza is inapplicable for that threshold reason.
Although Mendoza characterized the competitive standing doctrine as recognizing that
parties suffer “‘constitutional injury in fact when agencies lift regulatory restrictions on their
competitors or otherwise allow increased competition,’” the Court’s discussion of the limits of
that doctrine ultimately is consistent with that recognized in El Paso Natural Gas. Id. at 1011.
Specifically, the Court’s discussion makes clear that the doctrine necessarily rests on an allegation
that an agency has permitted competitors to engage in transactions that are contrary to law, either
because the agency is allegedly authorizing conduct by a competitor contrary to substantive law
(as in Bristol-Myers Squibb, supra) or allegedly has promulgated regulations that afford a
competitive advantage to one group over another without following the procedures required to
promulgate such regulations, which was the allegation in Mendoza. Here, Plaintiff has not alleged
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a procedural violation by Treasury, nor has it alleged that Treasury has authorized conduct by a
competitor contrary to substantive law that caused it injury within the “zone of interest” protected
by the statutory provision authorizing payroll support payments.
2. Plaintiff Has Failed To Establish Causation Or Redressability.
Even if the competitive standing doctrine could apply here, that doctrine concerns only the
injury-in-fact element of standing and does not speak to the required elements of causation and
redressability, which must be separately established. Mendoza, 754 F.3d at 1011. Air Excursions
has failed to establish causation or redressability, neither of which is addressed in Plaintiff’s
motion.
To meet its burden on causation, Air Excursions must establish an injury in fact that is
“fairly . . . traceable to the challenged action of the defendant, and not . . . the result [of] the
independent action of some third party not before the court.” Lujan, 504 U.S. at 560. Where, as
here, the “[t]he existence of one or more of the essential elements of standing depends on the
unfettered choices made by independent actors not before the courts and whose exercise of broad
and legitimate discretion the courts cannot presume either to control or predict,” standing is
“substantially more difficult to establish.” Id. at 562 (quotations omitted). Plaintiff fails to
explain how the negotiating position of FLOAT on the issue of gate space in March 2021, which
Plaintiff identifies as the reason (at least “in part”) for its inability to enter that particular air
passenger market at that time, is traceable to the approximately $5 million in payroll support
payments that had been made to New Corvus before that month or the additional $5 million that
was paid during the month of March. Plaintiff has not alleged when the gate space had been
leased to FLOAT (i.e., whether it was before or after Treasury’s disbursement to New Corvus),
and thus has alleged no connection between FLOAT’s acquisition of that lease and Treasury’s
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disbursement of payment support payments to New Corvus. Nor has Plaintiff pled facts
demonstrating any connection between FLOAT’s negotiating position and New Corvus’s receipt
of those payments.
Air Excursions appears to suggest that FLOAT was emboldened to take a tough
negotiating stance on a sublease arrangement because of those payments to its subsidiary, but has
pled no facts that would support an inference that FLOAT would have taken a different
negotiating position without such payments. See Nguyen v. Dep’t of Homeland Sec., 460 F. Supp.
3d 27, 36 (D.D.C. 2020) (immigrant plaintiffs failed to demonstrate that an order preventing the
enforcement of a Presidential Proclamation would redress their injuries, because the COVID
pandemic had already resulted in the worldwide suspension of visa services). According to
Plaintiff’s own allegations, FLOAT had leased all of the commuter gates at the airport, which by
itself would have given it leverage in any such negotiation. And, although Plaintiff characterizes
FLOAT’s negotiating position as lacking “good faith” (Compl. ¶ 42), that subjective assertion is
entirely conclusory and ultimately insufficient. Such allegations establish that Plaintiff’s asserted
harm is the result of independent action by a third party (FLOAT) that is not before the Court,
rather than the challenged conduct of the Treasury Department. Accordingly, Plaintiff has failed
to establish the causation requirement for standing.
Finally, for similar reasons, Air Excursions has failed to establish redressability, the idea
that the injury alleged can be redressed by a favorable decision. Florida Audubon Soc. v. Bentsen,
94 F.3d 658, 663-64 (D.C. Cir. 1996) (“Redressability examines whether the relief sought . . . will
likely alleviate the particularized injury alleged by the plaintiff.”). Stated plainly, a Court ordering
the Treasury Department to claw back the first round of Payroll Support Program payments made
to New Corvus would not require FLOAT to change its negotiating position with respect to
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subleasing gate space. Plaintiff’s assertion that a clawback “would likely cause FLOAT to curtail
its anticompetitive conduct” (Compl. ¶ 44) is entirely conclusory and unsupported by Air
Excursions’ limited allegations. See Nguyen, 460 F. Supp. 3d at 36 (“Simply put, the court cannot
remedy an injury that is not caused by the challenged action before it.”).
For example, in C-SPAN v. FCC, various cable programmers challenged an FCC regulation
that required cable operators to carry certain broadcast network TV channels. 545 F.3d 1051 (D.C.
Cir. 2008). The plaintiffs alleged that cable operators would therefore “have less bandwidth to fill
and [could] thus afford to drive harder bargains with potential suppliers.” Id. at 1054-55. The
D.C. Circuit noted that cable operators had many choices about how to allocate their bandwidth
capacity and held that the plaintiffs had failed to “adduce facts showing” that they would be the
recipients of that additional bandwidth capacity if the regulation was struck down. Id. at 1057.
Accordingly, their showing of redressability was speculative, which required dismissal. Id.
So too here. Plaintiff has adduced no facts showing that it will be the recipient of a fairly
priced sublease of commuter gate space at the Anchorage airport if Treasury claws back funds
from New Corvus. Perhaps New Corvus (or FLOAT) has a balance sheet that could absorb the
repayment of some of its PSP funds to Treasury, or perhaps New Corvus (or FLOAT) could raise
capital or sell assets to repay Treasury. If FLOAT decided to raise funds by subleasing its
Anchorage gate space, perhaps it would sublease that gate space to other market participants rather
than Air Excursions (which seeks to compete with New Corvus over identical routes). Or perhaps
FLOAT would bargain in good faith with Air Excursions to sublease the gate space, but the parties
still would not be able to reach an agreement for any number of reasons. In any event, Plaintiff’s
allegation that clawing back the first round of PSP funds “upon information and belief, would
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likely cause FLOAT to curtail its anticompetitive conduct,” (ECF No. 9-1, Craford Decl. ¶ 11), is
entirely speculative.
Regardless, according to the August 3, 2021 press release announcing direct flights
between Anchorage and Dutch Harbor, Air Excursions appears to have successfully arranged for
gate space at the Anchorage airport. Accordingly, Plaintiff appears to have entered this market
without need of the relief it requests in this lawsuit. (Ex. 3 hereto).
II. The Terms And Conditions Of Treasury’s Payroll Support Disbursements Were
Committed To Agency Discretion And Are Not Justiciable Under The APA.
The APA generally authorizes judicial review of “final agency action for which there is no
other adequate remedy in a court.” 5 U.S.C. § 704. When APA review is available, a court may
set aside final agency action that is “arbitrary, capricious, an abuse of discretion, or otherwise not
in accordance with law,” id. § 706(2)(A), or “compel agency action unlawfully withheld or
unreasonably delayed,” id. § 706(1).
“[B]efore any review at all may be had,” however, “a party must first clear the hurdle of
§ 701(a),” Heckler v. Chaney, 470 U.S. 821, 828 (1985), which precludes review under the APA if
the challenged agency action is “committed to agency discretion by law.” 5 U.S.C. § 701(a)(2). 7
7
The D.C. Circuit has observed that the judicial review provisions of the APA, 5 U.S.C.
§§ 701-706, provide ‘a limited cause of action for parties adversely affected by agency action,’”
but do not operate as a jurisdictional bar. Oryszak v. Sullivan, 576 F.3d 522, 524-25 (D.C. Cir.
2009); but see Goodwin v. Sec’y of HUD, 356 F.3d 310, 312-13 (D.C. Cir. 2004) (holding that the
availability of an alternative remedy deprived the Court of jurisdiction for a claim under the APA);
Baltimore Gas & Elec. v. FERC, 252 F.3d 456, 461 (D.C. Cir. 2001) (no jurisdiction over challenge
to FERC’s discretionary decision to settle an enforcement action rather than to see it “through to
fruition”); see also Citizens for Responsibility & Ethics in Washington v. DOJ, 164 F. Supp. 3d
145, 150 (D.D.C. 2016) (noting “a dispute among the courts of this District as to whether the
argument Defendants make here—FOIA offers an alternative remedy and thus precludes a claim
under the APA—should be reviewed under Rule 12(b)(6) for failure to state a claim or under Rule
12(b)(1) for lack of subject matter jurisdiction”). Consequently, Rule 12(b)(1) is cited as an
alternative basis for dismissal.
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Action is committed to agency discretion if it is of the kind “traditionally regarded as unreviewable,
such as the allocation of funds from a lump-sum appropriation,” Weyerhaeuser Co. v. U.S. Fish &
Wildlife Serv., 139 S. Ct. 361, 370 (2018) (citing Lincoln v. Vigil, 508 U.S. 182, 191-92 (1993)),
or “an agency’s decision not to institute enforcement proceedings,” Lincoln, 508 U.S. at 191.
Section 701(a)(2) also precludes review if the statute underlying a plaintiff’s challenge “is drawn
so that a court would have no meaningful standard against which to judge the agency’s exercise of
discretion.” Lincoln, 508 U.S. at 191. As one court has explained,
There is “no law to apply” when there are no “substantive legal criteria
against which an agency’s conduct can be seriously evaluated.” Drake v.
F.A.A., 351 U.S. App. D.C. 409, 291 F.3d 59, 70 (D.C. Cir. 2002). Thus,
when a statute provides an agency with such broad decision-making powers
that no “concrete limitations . . . on the agency’s exercise of discretion” or
“‘judicially manageable standards’ are discernable, meaningful judicial
review is impossible, and agency action is shielded from the scrutiny of the
courts.” Id. at 70.
Wendland v. Gutierrez, 580 F. Supp. 2d 151, 153 (D.D.C. 2008). In sum, the exception to
judicial review for agency “action committed to agency discretion” applies to agency decisions
that either (1) fall into “certain categories of administrative decisions that . . . [are] committed to
agency discretion,” such as “a decision not to institute enforcement proceedings” or to “allocat[e]
. . . funds from a lump-sum” or (2) arise from a statute that “is drawn so that a court would have
no meaningful standard against which to judge the agency’s exercise of discretion.” Physicians
for Soc. Resp. v. Wheeler, 956 F.3d 634, 642 (D.C. Cir. 2020) (internal quotation marks omitted).
Here, given the emergency nature of the CARES Act legislation and the expedited
timeframe for its implementation, Congress delegated considerable discretion to the Secretary in
administering payroll support payments, providing that “[f]inancial assistance provided to an air
carrier or contractor under this subtitle shall be in such form, on such terms and conditions . . . as
the Secretary determines appropriate.” CARES Act, 134 Stat. 281 at § 4113(b)(1)(A). As
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discussed below, that degree of discretion – essentially what the Secretary deems appropriate –
“foreclose[s] the application of any meaningful judicial standard of review” and precludes an APA
claim under section 701(a). Webster v. Doe, 486 U.S. 592, 600 (1988) (statute allowing
termination “whenever the Director ‘shall deem such termination necessary or advisable in the
interests of the United States’” is a standard that “fairly exudes deference to the Director, and
appears to us to foreclose the application of any meaningful judicial standard of review”); see also
Drake v. FAA, 291 F.3d 59, 72 (D.C. Cir. 2002), cert. denied, 537 U.S. 1193 (2003) (statute
establishing a subjective standard of what “the agency thinks” about a particular issue is not subject
to APA review); CC Distributors, Inc. v. United States, 883 F.2d 146, 153-54 (D.C. Cir. 1989)
(where statute left to Secretary of Defense to “determine” what functions could be performed by
contractors versus military or government personnel, APA review was not available). 8
As an initial matter, the only constraint that the CARES Act placed on the Secretary’s
discretion in determining eligibility for payments was the statutorily imposed requirement that
the recipient be an air carrier. See 134 Stat. 281 at § 4111; 49 U.S.C. § 40102(a)(2) (“‘[A]ir
carrier’ means a citizen of the United States undertaking by any means, directly or indirectly, to
provide air transportation.”). Corvus indisputably is an air carrier, and that acknowledged fact
8
Plaintiff’s theory as articulated in its preliminary injunction motion is that New Corvus was
not a proper recipient of disbursements made under the first PSP Agreement pursuant to the
CARES Act because Old Corvus was the signatory on that agreement and New Corvus was not a
“successor” to Old Corvus in Plaintiff’s view. Plaintiff, however, has offered no theory as to why
New Corvus was not a proper recipient of payroll support payments under the second and third
PSP Agreements that New Corvus signed pursuant to the Consolidated Appropriations Act, 2021,
and American Rescue Plan Act of 2021. Further, the same degree of discretion over the terms and
conditions of payroll support disbursements afforded the Treasury Secretary under the CARES
Act was afforded to the Secretary under those statutes. See 134 Stat. 1182 at § 403(b)(1)(A); 135
Stat. 4 at § 7301(b)(3-4). Thus, on the issue of agency discretion, the analysis remains the same
without regard to the statute under which the disbursement was made.
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distinguishes this case from Confederated Tribes of the Chehalis Reservation v. Mnuchin, 456 F.
Supp. 3d 152 (D.D.C. 2020), on which Plaintiff relies. That case concerned a different provision
of the CARES Act that afforded financial assistance to “Tribal governments,” a term defined in
the statute. See 134 Stat. 281 at § 5001. The question before the Court in that case was whether
the recipient constituted a “Tribal government” within the meaning of the statute. Id. at 165-66.
That statutorily imposed requirement for eligibility limited the Secretary’s discretion and provided
a standard by which the Court could review whether the recipient met that definition. Id. at 161
(Congress “circumscribed the agency's discretion by supplying a concrete definition of ‘Tribal
government’ against which to measure eligibility for Title V funds and, correspondingly, for the
court to conduct judicial review.”).
Here, in contrast, the question is whether Corvus – an eligible air carrier under the statute
– satisfies the terms and conditions for payment that were established by the Secretary through an
exercise of broad discretion authorized by the statute. Following enactment of the CARES Act,
Treasury promulgated a standard form to be used by applicants seeking PSP payments, which set
forth the application procedures pursuant to section 4113(b)(1) of the CARES Act. (Leibenluft
Decl. ¶ 3 and Ex. 1). Consistent with the considerable discretion afforded the Secretary under that
Act, the form provides that “[t]hese procedures may be updated, revised, or modified at any time,
and the requirements contained herein may be waived by the Secretary of the Treasury in his sole
discretion to the extent permitted by law.” (Id., Ex. 1 at 1).
Treasury also set forth the terms and conditions for disbursement in the standard form PSP
contracts that were signed before disbursements were made. Although the PSP Agreement
contains defined terms, including the term “recipient,” which is the focus of the Complaint, it also
provides that the definitions set forth in the Agreement are not to be rigidly applied when “the
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context clearly requires otherwise,” thus affording Treasury discretion to consider the relevant
“context” in applying those terms. (Ex. 2 to Leibenluft Decl. at 2).
The PSP Agreement contains a series of provisions underscoring the breadth of Treasury’s
discretion in implementing the program. The agreement “shall be construed in a manner
consistent with any public guidance Treasury may from time to time issue regarding the
implementation of the” Payroll Support Program; with respect to payments under the agreement,
“the amounts (individually and in the aggregate) and timing of such payments will be determined
by the Secretary in his sole discretion”; under the agreement, “[t]he Secretary may, in his sole
discretion, increase or reduce the” amount a company receives “consistent with section 4113(a) of
the CARES Act” and to address any shortfall of funds; and “Treasury may, in its sole discretion,
waive any term or condition under this Agreement imposing a requirement on the Recipient or
any Affiliate.” (Ex. 2 to Leinbeluft Decl. at p. 2 and ¶¶ 2, 47). These same provisions appear in
the second and third PSP agreements as well. (Ex. 5 to Leibenluft Decl. at p. 2 and ¶¶ 2, 47; Ex.
6 to Leibenluft Decl. at p. 2 and ¶¶ 2, 47).
Finally, the Secretary also was given wide discretion in section 4113(b)(1) of the CARES
Act over the terms and conditions for the clawback of any disbursed funds. See CARES Act, 134
Stat. 281 at § 4113(b)(1)(A). The statute provides that “[f]inancial assistance provided to an air
carrier or contractor under this subtitle shall be . . . on such terms and conditions . . . including
requirements for audits and the clawback of any financial assistance . . . as the Secretary
determines appropriate.” Id. (emphasis added)
In the exercise of the considerable discretion granted by Congress, Treasury included a
remedy section in its standard form PSP agreement that could be invoked by Treasury in its
discretion in the event Treasury “believes” that an instance of noncompliance has occurred. (Ex.
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2 to Leinbeluft Decl. at ¶ 22). The remedy section further provided that, in the event Treasury
determines that an instance of noncompliance has occurred, Treasury “may, in its sole discretion,”
elect from various remedial options, including to “withhold any Additional Payroll Support
Payments; require the repayment of the amount of any previously disbursed Payroll Support, with
appropriate interest; require additional reporting or monitoring; initiate suspension or debarment
proceedings as authorized under 2 CFR Part 180; terminate this Agreement; or take any such other
action as Treasury, in its sole discretion, deems appropriate.” (Id. at ¶ 23). Such a provision
appears in the first PSP Agreement (id.), as well as the other PSP Agreements at issue. (Ex. 5 to
Leibenluft Decl. at ¶¶ 22-23; Ex. 6 to Leibenluft Decl. at ¶¶ 22-23). The Secretary has made no
determination that Corvus – the PSP recipient that is the focus of this lawsuit – failed to comply
with the terms and conditions of the PSP assistance that it received. (Leibenluft Decl. ¶ 13).
Thus, even if arguendo Plaintiff has standing, its APA claim fails on the merits at the
threshold for two reasons. First, the Secretary of the Treasury had discretion to interpret the terms
“successors” and “assigns” as used in the definition of “recipient” in the PSP Agreement as broadly
as it deemed the context to require. The bankruptcy court issued its order approving the Asset
Purchase Agreement with the understanding that the funds to be provided under the first PSP
Agreement would be disbursed to the purchaser of Old Corvus’s capital stock and assets. Indeed,
Old Corvus so advised the bankruptcy court when it sought permission from the bankruptcy court
to execute the first PSP Agreement. (Case No. 20-10755, ECF No. 377 at 6, 8). And FLOAT
acquired all of the capital stock of Old Corvus in connection with the Asset Purchase Agreement.
Consequently, Treasury had discretion to consider this context in interpreting the terms
“successors” and “assigns” as used in the definition of “recipient” under the PSP Agreement and
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thus to interpret those terms as encompassing New Corvus. Treasury also had discretion under
the express terms of the PSP Agreement to waive any alleged limitation imposed by that definition.
Second, the Secretary retains the sole discretion under the PSP Agreement to determine
whether a recipient is in noncompliance and, if so, whether to invoke a clawback remedy or any
other remedy for any such noncompliance. Congress did not mandate a clawback remedy in the
CARES Act, or establish any terms or conditions for invoking such a remedy, but left all such
matters to the Secretary’s discretion. In exercising that discretion, the Secretary included a
clawback remedy in the standard PSP Agreement, but specified that whether to invoke that
remedy, a different remedy, or no remedy at all for noncompliance fell exclusively within the
Secretary’s discretion.
It is well established that, absent some specific statutory limitation on an agency’s
enforcement discretion, the decision whether to institute an enforcement action is committed to the
agency’s discretion by law and is therefore unreviewable. Chaney, 470 U.S. at 838. Indeed, as the
D.C. Circuit has observed, “Chaney’s recognition that the courts must not require agencies to
initiate enforcement actions may well be a requirement of the separation of powers commanded
by our Constitution. The power to take care that the laws be faithfully executed is entrusted to the
executive branch -- and only to the executive branch. . . . One aspect of that power is the
prerogative to decline to enforce a law, or to enforce a law in a particular way.” Baltimore Gas &
Elec., 252 F.3d at 459.
Courts, therefore, presumptively lack jurisdiction over challenges to an agency’s
discretionary determination to “decline to enforce a law, or to enforce a law in a particular way”
instead of a plaintiff’s preferred way. See id. at 461. It is settled that a court cannot usurp such a
discretionary determination and order an agency to “enforce a law in a particular way,” which is
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effectively what Plaintiff seeks here. For that additional reason, Plaintiff’s claim is precluded by
section 701(a) of the APA.
III. Plaintiff Has Failed To State A Claim.
Apart from the issue of agency discretion, Plaintiff has failed to plausibly plead a violation
of the APA for two additional reasons. As discussed above, Plaintiff’s theory that New Corvus
was an improper recipient of payroll support payments is premised on the contention that New
Corvus was not a “successor” to Old Corvus and thus no “recipient” as that term was defined in
the first PSP Agreement. Plaintiff relies on the “no successor” language in the bankruptcy court’s
order approving the asset sale, but, as a review of that order and the record before the bankruptcy
court reflects, the cited language addressed the issue of liabilities and was not intended to
invalidate the transfer of PSP rights contemplated in the Asset Purchase Agreement that was the
subject of the order.
In other words, Plaintiff’s overly broad reading of the “no successor” language that it
cherry-picks from the asset sale order is not a reasonable interpretation of the order because the
purpose of the order was to approve a sale of assets that included the transfer of PSP rights to the
purchaser, which was a condition of the purchaser’s bid and a condition precedent of the asset
sale approved by the bankruptcy court in the asset sale order. (Case No. 20-10755, ECF No. 434-
1; id. ECF No. 492-1, Asset Purchase Agreement § 7.2(e)). Air Excursions’ interpretation would
lead to the absurd result of the bankruptcy court negating by its asset sale order a material aspect
of the asset sale (the transfer of rights to CARES Act disbursements) that the order was approving.
Second, Plaintiff’s argument ignores that the definition of the term “recipient” is not
limited to “successors” of Old Corvus but also includes its “assigns” and, in that regard, the Asset
Purchase Agreement that was approved by the bankruptcy court states that the PSP Agreement
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executed in July 2020 was being assigned to FLOAT, with disbursements to be made to New
Corvus. (Case No. 20-10755, ECF No. 492-1 at § 5.6(e) and § 7.2(e)) Section 5.6(e) of the Asset
Purchase Agreement, for instance, states that “Seller and Buyer shall use commercially reasonable
efforts to cooperate, assist, and consult with each other through Closing in connection with Buyer’s
efforts to obtain the Department of Treasury approval of the assignment to Buyer of the PSP
Agreement and disbursement of the PSP Funds to Corvus.” (Id.) And section 7.2(e) makes the
approval by the Department of Treasury of the “assignment to Buyer of the PSP Agreement” a
condition precedent of the asset sale. (Id.)
Although the limited record currently before the Court does not reflect a written approval
of this assignment by Treasury, the Asset Purchase Agreement did not require that any such
approval be in writing and Treasury’s disbursement of the funds to New Corvus reflects an
approval of the assignment by implication. Plaintiff, in any event, has failed to plead that New
Corvus was not an assignee of the rights to the payroll support payments, and the Asset Purchase
Agreement which is incorporated by reference into the Complaint reflects that it was.
Consequently, Plaintiff has failed to plausibly plead that New Corvus was not a “recipient” under
the Payroll Support Agreement by virtue of the assignment language in the Asset Purchase
Agreement and, therefore, has failed to state a claim for this additional reason.
Finally, Plaintiff’s theory fails to address the disbursements made to New Corvus under
the second and third PSP agreements. Under those agreements, the signatory was New Corvus
and, as such, New Corvus met the definition of “recipient” as it was the “Signatory Entity.” 9
9 Lastly, although Plaintiff brings APA claims, Defendant should be excused from any
requirement of Local Civil Rule 7(n) to produce an administrative record with the filing of this
dispositive motion. The production of an administrative record at this stage is unnecessary—
Defendant seeks to dismiss this case not based on an administrative record, but instead based on
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IV. Plaintiff Has Failed To Meet Its Burden For Preliminary Injunctive Relief.
A. Plaintiff Has Failed To Demonstrate A Likelihood Of Success On The Merits.
As the above discussion establishes, Plaintiff lacks standing to assert a claim against
Treasury under the APA with respect to disbursements made to another air carrier under the
CARES Act and subsequent legislation. In addition, the terms and conditions of such
disbursements are matters within Treasury’s sole discretion, including whether to waive any
specific terms and conditions in a particular case, as well as what remedy to invoke (if any) in the
event Treasury determines in its discretion that a recipient of payroll support funds is not in
compliance. Finally, apart from the issue of agency discretion, Plaintiff has failed to plausibly
plead a violation of any statute, regulation, or provision of the PSP Agreement and, therefore, has
failed to state a claim. Accordingly, Plaintiff has failed to demonstrate a likelihood of success on
the merits to support its claim for preliminary injunctive relief.
B. Plaintiff Has Not Demonstrated That It Will Suffer Irreparable Harm, And The
Balance Of Equities Favors Defendants.
“Regardless of how the other three factors are analyzed, it is required that the movant
demonstrate an irreparable injury.” Mdewakanton Sioux Indians of Minnesota, 255 F. Supp. 3d
48, 51 (D.D.C. 2017) (footnote omitted). “The basis of injunctive relief in the federal courts has
always been irreparable harm.” Sampson v. Murray, 415 U.S. 61, 88 (1974); see also CityFed Fin.
Corp. v. Office of Thrift Supervision, 58 F.3d 738, 747 (D.C. Cir. 1995). The Supreme Court’s
“frequently reiterated standard requires Petitioners seeking preliminary relief to demonstrate that
the absence of jurisdiction and a failure to state a cognizable claim. See, e.g., Connecticut v. Dep’t
of Interior, 344 F. Supp. 3d 279, 294 (D.D.C. 2018) (granting the government’s motion to waive
compliance with Local Civil Rule 7(n) because the court did not need to consider the
administrative record in deciding the government’s motion to dismiss) (citing cases).
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irreparable injury is likely in the absence of an injunction.” Winter, 555 U.S. at 22 (emphasis in
original). Moreover, conclusory or speculative allegations are not enough to establish a likelihood
of irreparable harm. Henke, 842 F. Supp. 2d at 59. “Issuing a preliminary injunction based only
on a possibility of irreparable harm is inconsistent with our characterization of injunctive relief as
an extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is
entitled to such relief.” Winter, 555 U.S. at 22; see also Wisc. Gas, 758 F.2d at 674 (mere
speculation is not sufficient to establish irreparable harm); Bartko, 2015 WL 13673371 at *2 (“The
Court need not grant injunctive relief ‘against something merely feared as liable to occur at some
indefinite time.’”); Farris, 453 F. Supp. 2d at 78 (higher standard applies when the moving party
seeks to alter the status quo, rather than preserve it: the movant must show ‘clearly’ that [it] is
entitled to relief or that extreme or very serious damage will result.”) Plaintiff has failed to make
this showing.
Plaintiff makes no attempt to allege any irreparable injury and, indeed, its recent entry into
the air passenger market that is being serviced by Corvus would preclude any such assertion.
Instead, Plaintiff asserts that “[b]y establishing its right to relief under the APA, Air Excursions
has met its burden of proof with respect to the irreparable injury element of the test for preliminary
injunctive relief.” (ECF No. 9, Pl. Mot. at 17). Plaintiff, however, has failed to establish a right
to relief under the APA and, in any event, the irreparable harm requirement for preliminary
injunctive relief is independent of a showing of a likelihood of success on the merits. Nor has
plaintiff shown or cited authority establishing that a mere allegation of any asserted arbitrary or
capricious action is sufficient to establish an irreparable injury. Plaintiff’s contention would
effectively read the irreparable injury requirement out of any APA action. Consequently,
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Plaintiff’s motion should be denied for failure to establish irreparable injury in the absence of the
relief requested.
Finally, the balance of equities weighs against issuing a preliminary injunction. While
Plaintiff asserts that New Corvus is impeding competition in the Alaskan air passenger market,
Plaintiff is not bringing antitrust or unfair competition claims against the party that it claims is
actually causing it harm. Instead, Plaintiff requests an injunction to impose financial harm upon
New Corvus in the hopes that doing so will provide Plaintiff leverage in potential future business
negotiations. Treasury provided payroll support payments to air carriers and contractors—
including New Corvus, Air Excursions, and Kalinin Aviation—in an attempt to keep aviation
workers employed despite the impact of the COVID-19 pandemic on the domestic aviation
industry. It is not in the public interest to claw back funds from one of these entities in order to
provide a competitive business advantage to another, a factor that further weighs against Plaintiff’s
request for preliminary injunctive relief.
CONCLUSION
For reasons stated above, the Court should deny Plaintiff’s request for a preliminary
injunction and dismiss the Complaint with prejudice.
Respectfully submitted,
CHANNING D. PHILLIPS, D.C. BAR #415793
Acting United States Attorney
BRIAN P. HUDAK
Acting Chief, Civil Division
By: ______/s/__________________
JEREMY S. SIMON, D.C. BAR #447956
Assistant United States Attorney
Civil Division
555 4th Street, N.W.
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Washington, D.C. 20530
(202) 252-2528
Jeremy.Simon@usdoj.gov
Counsel for Defendant
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