Purpose Built Families Found., Inc. v. United States

634 F.Supp.3d 1118

PURPOSE BUILT FAMILIES FOUNDATION, INC., Plaintiff, v. UNITED STATES of America, et al., Defendants.

Case No. 22-cv-60938-COOKE/HUNT

United States District Court, S.D. Florida

Entered October 7, 2022

Signed October 6, 2022

Alan Grayson, Pro Hac Vice, GL CTR PC, Orlando, FL, Ira Marcus, Fort Lauderdale, FL, Patrice Paldino, Legal Aid Service of Broward County, Inc., Plantation, FL, for Plaintiff.

Zakarij Neil Laux, US Attorney's Office, Civil Division, Miami, FL, for Defendants.

ORDER ON MOTION TO DISMISS

ROBIN L. ROSENBERG, UNITED STATES DISTRICT JUDGE for Marcia G. Cooke, United States District Judge

THIS MATTER is before the Court on Defendants' motion to dismiss. ECF No. 37. Plaintiff has opposed the motion. ECF No. 46. Having considered the parties' arguments, the record, and the relevant legal authorities the Court GRANTS Defendants' motion for the reasons stated below.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

I. The government's audits of Plaintiff's GPD and SSVF grants

This case concerns a dispute between Plaintiff Purpose Built Families Foundation, Inc. ("Plaintiff" or "PBF") and Defendants the United States of America and the Secretary of Veteran Affairs (collectively, "Defendants" or "the government"). PBF is a non-profit corporation operating in Broward County. ECF No. 1 ¶ 2 (complaint). PBF receives grants from the government, which it uses to provide services to veterans. Id. ¶ 6. At some point in 2021, the government began auditing PBF in connection with these grants.

On May 11, 2022, the government issued two letters to PBF. The first letter notified PBF that the government would be immediately withholding certain payments under two grants issued through the Grant and Per Diem program ("GPD"), pending the completion of the government's audit of those grants. See ECF No. 12-2 at 1 (copy of GPD letter). The second letter notified PBF that the government would be terminating three of PBF's grants received through the Supportive Services for Veterans Families ("SSVF") program "upon 7-days receipt of this notice." See ECF No. 12-1 at 1 (copy of SSVF letter).

II. The instant lawsuit and the government's withdrawal of the May 11 letters

PBF filed this lawsuit on May 17, 2022, raising two claims under the Administrative Procedure Act, 5 U.S.C. § 701 et seq. ("APA"), and alleging the government's May 11, 2022, letters constituted arbitrary and capricious agency action. See ECF No. 1 ¶¶ 1, 30. PBF further moved for injunctive relief, to keep the government from terminating these grants. ECF No. 5.

The Court set a hearing on Plaintiff's motion for May 18, 2022, but Plaintiff's counsel notified the Court that it would be unable to make it to the courthouse in time for the hearing. ECF No. 9. Accordingly, to preserve the status quo, the Court granted in part Plaintiff's motion, entered a temporary restraining order to expire the morning of May 19, 2022, and reset the hearing for that same day. Id.

At the May 19 hearing, the parties agreed to extend the temporary restraining order for 14 days, and the Court subsequently referred this matter to Magistrate Judge Patrick Hunt. ECF No. 11. The Court asked Judge Hunt to determine whether the temporary restraining order should be dissolved, extended, or converted into a preliminary injunction, and ordered briefing from the parties on this issue. Id.

Also on May 19, 2022, the government issued an additional letter to Plaintiff concerning the three SSVF grants. The letter stated that the government would "withdraw[ ] its May 11, 2022 notice to the extent it states that SSVF grants will terminate as of May 18, 2022." ECF No. 27-2 at 1 (copy of letter). The letter stated that instead Plaintiff would have until June 19, 2022, to submit a written response to the government's audit. Id. The letter also stated that at some point after receiving PBF's written response the government would "issue a final decision and . . . notify PBF of that decision writing." Id. at 2.

On May 25, 2022, the government issued a similar letter to PBF concerning the two GPD grants. The letter stated that the government would "withdraw[ ] its May 11, 2022 notice of withhold of payments and admissions and notice of intent to suspend." ECF No. 27-3 at 1. The letter stated that an audit of the GPD grants was ongoing, that the government would provide PBF with a copy of the final audit report upon completion, "and advise as to corrective action, if any, that may be required." Id.

III. The preliminary injunction hearing and the instant motion to dismiss

In early June 2022, Judge Hunt held a hearing, and the parties agreed to extend the temporary restraining order until the Court ruled on Plaintiff's motion for a preliminary injunction. ECF No. 33. Judge Hunt subsequently issued a report and recommendation, recommending the Court dissolve the temporary restraining order and deny the motion for a preliminary injunction. ECF No. 38.

Days before Judge Hunt issued his report and recommendation, Defendants filed a motion to dismiss. ECF No. 37. The government argues that the Court lacks subject matter jurisdiction because this case presents no final agency action by a government agency for the Court to review. Id. at 10. According to the government, the May 11, 2022, letters were not final agency action within the meaning of the APA. Id. at 8. Further, the government argues that even if these letters were final agency action, the May 19, 2022, and May 25, 2022, letters withdrew these earlier government decisions, thereby rendering this case moot. Id. at 9. Thus, the government asks the Court to dismiss this case.

PBF opposed the motion to dismiss on three main grounds. See ECF No. 46. First, PBF argues that the Court should assess jurisdiction on the facts as they stood at the filing of the complaint. Id. at 4. Second, PBF argues that the government's actions after this suit was filed do not render the matter moot under the doctrine of voluntary cessation. Id. at 5. Finally, PBF argues that even if there is no final agency action, the APA authorizes the Court to hear this case and issue injunctive relief. Id. at 12.

Neither party has notified the Court of a final decision to terminate GPD or the SSVF grants. The government states in briefing that a final decision is still pending, and the audits of the SSVF and GPD grants are ongoing. ECF No. 37 at 9. PBF does not dispute this.

LEGAL STANDARD

I. Motion to dismiss and mootness

On a motion to dismiss, the Court "accept[s] the factual allegations supporting a claim as true and draw[s] all reasonable inferences in favor of the nonmovant." Newton v. Duke Energy Fla., LLC, 895 F.3d 1270, 1275 (11th Cir. 2018). However, under Federal Rule of Civil Procedure 12(b)(1), a party may move to dismiss a case for lack of subject matter jurisdiction based on a "factual attack" concerning some extrinsic fact not in the plaintiff's complaint. See Kennedy v. Floridian Hotel, Inc., 998 F.3d 1221, 1230 (11th Cir. 2021). In such circumstances, the Court may consider "extrinsic evidence" not contained in the pleadings. Id.¹

"Mootness arises when an issue presented in a case is no longer live or the parties lack a legally cognizable interest in the outcome [of the case]." Keohane v. Fla. Dep't of Corr. Sec'y, 952 F.3d 1257, 1267 (11th Cir. 2020) (cleaned up). Mootness is a jurisdictional question, and where events subsequent to the filing of a lawsuit deprive the court of the ability to give the plaintiff meaningful relief, the court must dismiss the case. Id.

Courts recognize an exception to mootness where a defendant voluntarily ceases certain conduct to manipulate jurisdiction. Harrell v. The Fla. Bar, 608 F.3d 1241, 1266 (11th Cir. 2010). To determine whether the voluntary cessation exception applies, courts examine several factors and assess whether there is a reasonable expectation that a government defendant will reverse course, notably whether: "(i) the change in conduct resulted from substantial deliberation or is merely an attempt to manipulate jurisdiction; (ii) the government's decision to terminate the challenged conduct was unambiguous, i.e., permanent and complete; and (iii) the government has consistently maintained its commitment to the new policy or legislative scheme." Djadju v. Vega, 32 F.4th 1102, 1109 (11th Cir. 2022). These considerations are not exclusive, and no factor is dispositive, but rather courts should assess these factors under the totality of circumstances. Id. Government entities and officials are "treated with more solicitude [than private parties] by the courts" in a voluntary cessation analysis. Seay Outdoor Advert., Inc. v. City of Mary Esther, Fla., 397 F.3d 943, 947 (11th Cir. 2005) (quotation omitted).

II. The APA and final agency action

"[T]o bring suit under the APA, plaintiffs must demonstrate that the decision at issue was 'final agency action.' " Canal A Media Holding, LLC v. United States Citizenship & Immigr. Servs., 964 F.3d 1250, 1255 (11th Cir. 2020) (quoting 5 U.S.C. § 704). "Absent a final action . . . courts are to exercise restraint so that the administrative agency may correct any errors by conducting its own internal appeals and by applying its own institutional expertise." LabMD, Inc. v. F.T.C., 776 F.3d 1275, 1278 (11th Cir. 2015).

The Supreme Court has adopted a two-part test for finality: (1) "the action must mark the consummation of the agency's decisionmaking process—it must not be of a merely tentative or interlocutory nature," and (2) "the action must be one by which rights or obligations have been determined, or from which legal consequences will flow." U.S. Army Corps of Engineers v. Hawkes Co., 578 U.S. 590, 597, 136 S.Ct. 1807, 195 L.Ed.2d 77 (2016) (quoting Bennett v. Spear, 520 U.S. 154, 177-78, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997)). In assessing finality, courts must as consider the pragmatic question of "whether judicial review at the time will disrupt the administrative process."...